North slope gas.

• Author: Tyson, Ray

Talk about a natural gas pipeline from Prudhoe Bay has bounced around Alaska for years. New efforts make the project more of a reality than ever before.

As the opportunity for marketing Prudhoe Bay natural gas in the Pacific Rim draws closer, gas owners Arco, Exxon and British Petroleum are quietly trying to untangle a complicated web of economic and technical issues now standing in the way of a major gas sale.

The task of resolving those issues has been handed to the so-called Gas-9 committee, comprised of three members from each of the major gas owners. The committee's formation can be viewed as the first serious effort by the producers to market about 26 trillion cubic feet of Prudhoe Bay gas, the largest known cache of natural gas in North America.

"We want to sell our gas, and we would sell it today if we could get a high enough price," declares Jerry Pollock, Arco's Prudhoe Bay engineering manager and member of the G-9 committee. Arco and Exxon each own about 40 percent of Prudhoe Bay gas, while BP holds most of the remaining 20 percent.

Just six years ago, prospects for marketing Prudhoe Bay gas appeared gloomy, particularly for Yukon Pacific Corp., the company that for a dozen years has been working on plans to build an elaborate transportation system to move 14 million tons of liquefied natural gas (LNG) a year from Alaska to markets in Japan, Korea and Taiwan.

Back then, a key study sponsored by Japan and North Slope producers concluded that the Japanese market could not absorb enough Alaska LNG to justify a world-class project like Yukon Pacific's Trans-Alaska Gas System (TAGS).

It wasn't long, however, before Japan and other Pacific Rim nations began acknowledging that additional LNG supplies would probably be required shortly after the turn of the century to meet their rapidly growing energy needs.

"We're a lot more hopeful," says Pollock. "Based on what we've learned, there may be a better opportunity after the year 2000. Given the necessary lead time, that's a very short time frame."

In the meantime, he adds, "We're just trying to do some of the spade work to position ourselves, if that market is there and we can compete. Our discussions with BP and Exxon have been preliminary discussions as to how we might be able to move the project forward."

While the North Slope producers want to sell their gas, there are myriad obstacles that must first be overcome. At the top of the list: trying to determine when the value of Prudhoe...