GAS-TO-LIQUIDS TEST PLANT RISES IN NIKISKI.

• Author: LOSHBAUGH, DOUG

GTL is not the only method of getting North Slope gas to market, but this procedure, using the existing trans-Alaska oil pipeline, does have some advantages.

BP managers believe they have the technology to turn a profit making synthetic crude oil from North Slope natural gas. They will test it with a new $86 million pilot plant now being built in Nikiski.

"This is the last step to prove the technology before we go full scale," said Dave Calvin, gas-to-liquids project manager for BP Exploration (Alaska) Inc.

The Nikiski plant will be a research plant rather than a commercial development. Each day, it will convert about 3 million cubic feet of natural gas into 300 barrels of synthetic crude.

"That's the size we would need to feel comfortable building an 80,000 or 100,000 barrel-per-day facility on the North Slope," Calvin said.

Construction Slated to Begin

BP Exploration has cleared a site for the pilot plant near the Tesoro Alaska Petroleum Co. refinery at Nikiski. Kvaerner Process Technology Ltd., a Dutch firm, is providing engineering, construction management and procurement. By press time, BP expected to award a contract for heavy construction and steelwork and to release a bid package for construction of warehouses and other buildings.

It already has hired contractors for many other tasks, including Dames & Moore, Hughes Drilling and Raven Contractors for geotechnical and environmental studies, soil borings and cleanup; Alaska Communications Systems for telephone lines; Nana Purcell for construction security and Enstar Natural Gas Co. for installation of low-pressure gas lines.

BP is negotiating to buy natural gas from Kenai Peninsula suppliers. It has agreed to buy three to four megawatts of power from Homer Electric Association. Between now and the end of 2001, it will hire contractors to provide water and septic service, equipment rental, waste handling, plant maintenance, landscaping and more. Managers expect to spend about half the $86 million in Alaska.

Heavy construction should begin this month and employ a peak of 150 to 200 people. The plant should open during the second quarter of 2002 and employ 10 to 15 full-time workers.

Options for Getting Gas to Market

BP's ultimate goal is to find a profitable way to move North Slope gas to market. Chemically changing the gas to synthetic crude, which could be shipped through the existing oil pipeline to tanker ships in Valdez, is just one of three options, said BP executive vice...