Exploring Natural Gas Development Options.

• Author: PARMELEE, CATHERINE

Who are Alaska's natural gas companies and what are they doing to drive the state's natural gas to world markets?

Twenty-first century technologies and an increasing market demand are fueling the feasibility of tapping Alaska's natural gas resources. The introduction of new technologies, such as 3-D seismic imaging, horizontal drilling and the development of high-strength steel that allows gas to be pushed through a pipeline at high pressure, have reduced finding and operating costs at a time when consumers are calling for clean-burning, cost-efficient, environmentally friendly fuel.

Many industry forecasters believe the demand for the natural gas will increase by 50 percent in the next 20 years on domestic shores alone. Over the past few years, our nation consumed about 21.5 trillion cubic feet of natural gas annually, according to the U.S. Energy Information Administration. That agency, along with other such experts, anticipate our country's gas demand could leap to more than 30 tcf per year by 2010. Consequently, it could be that the development of Alaska's natural gas is an opportunity whose time has come. Petroleum companies in the state presently are pouring millions of dollars into researching the economic feasibility of taking Alaska gas to world markets.

Known gas reserves on Alaska's North Slope are about 35 tcf. This is the equivalent to six billion barrels of oil, according to Ken Konrad, BP Exploration (Alaska) Inc.'s gas business unit manager. And U.S. government geologists project the region could contain 100 tcf, or about 17 billion barrels equivalent. Furthermore, these experts say just the general geological lay of Alaska's land suggests the state's gas resources are potentially higher than that. Although Alaska's natural gas companies are aggressively exploring the plausibility of developing those resources, they all agree with Phillips Alaska Inc. President and CEO Kevin Meyers that an Alaska natural gas project will need an established market and a proven profitability in order to finance delivery of those resources.

The Players

Alaska natural gas holdings are a principal portion of Phillips' portfolio. The international petroleum company owns about eight tcf, or roughly 1.5 billion barrels equivalent, on the North Slope. "The total is a significant part of the company's reserves," said George Findling, Phillips gas spokesman. "We're compelled to commercialize."

Phillips has a long history in the state as an explorer...