LNG and GTL gas extraction: two types of technologies are being considered for natural gas extraction on the North Slope.

• Author: Jones, Patricia
• Position: Liquefied natural gas and gas-to-liquids technologies

Two types of technologies are being considered natural gas extraction on the North Slope.

Liquefied natural gas, a long-established technology in the energy industry, is a transportation method used worldwide to move that product to market.

Gas-to-liquids, also described as white crude, is emerging as an alternative to LNG in the energy sector, although no one has yet come up with an economic method of using this form of natural gas in a commercial-sized project.

Alaska's oil giants, who are sitting on one of the world's largest-known pockets of natural gas, are considering both technologies in their research effort to tap that North Slope resource.

"Ultimately, I'm a believer that there's probably enough gas on the Slope for both technologies to be developed and used," said David Lawrence, manager of gas commercialization and marketing for Arco Alaska Inc.

"LNG is the base case - we know the most about it and are devoting most of our resources to that," he said. "Gas-to-liquids is the dark horse. There's a lot of work that needs to be done on that technology, but it could be applied in Alaska at some point."

The main difference between the two methods is the final product produced. LNG projects produce gas that requires specialized handling facilities for use, while gas-to-liquids makes synthetic petroleum products similar to those created from crude oil.

That means potentially different markets for the 35 trillion cubic feet of natural gas already tapped in Alaska's North Slope oil fields.

But both Lawrence and his counterpart at BP Exploration (Alaska) Inc. say there's no competition between the two technologies.

"They're not mutually exclusive," said David Brooks, BP's manager of Alaska gas. "At the moment, we have two options that we're working on. Neither is economic, but there's plenty of gas on the North Slope that we could do both."

That's the rub. Neither technology will be brought to Alaska if costs cannot be whittled down or if market prices do not increase substantially.

And with a lingering malaise hanging over the energy sector, particularly oil companies, the environment isn't very promising right now for another big natural resource project in Alaska, no matter what type of technology is used.

"It's hard to attract capital to build projects at these very low prices," said Chuck Logsdon, petroleum economist with the state Department of Revenue. "It's the same reason we've seen drilling rigs idled up on the North Slope."

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