Private construction outlook: a look at projects across Alaska.

• Author: Stricker, Julie
• Position: CONSTRUCTION

For 2014, Alaska's big construction projects are happening in the oilfields.

The passage of SB21, which instituted a flat 35 percent tax structure on oil companies and included credits as an incentive to increase production, almost immediately resulted in the major oil companies announcing plans to increase capital investment on the North Slope.

In its annual construction spending forecast, the Construction Industry Progress Fund and the Associated General Contractors of Alaska predicted an 18 percent increase in construction spending in 2014, about $9.2 billion. Oil and gas makes up more than half of that total, with private construction spending up 24 percent.

Overall spending in the oil and gas segment is expected to climb 33 percent, according to the Construction Industry Progress Fund report, which was compiled by the University of Alaska's Institute of Social and Economic Research and underwritten by Northrim Bank.

The report, however, was issued before BP Alaska announced the sale of interests in four of its North Slope fields to Hilcorp. The sale, announced in April, transferred all of BP's interests in the Endicott and Northstar fields to Hilcorp, as well as half its interests in Liberty and Milne Point.

BP has said it plans to focus its attention on the core Prudhoe Bay fields and a potential natural gas pipeline from the North Slope to Southcentral Alaska. It had previously announced plans to increase its capital spending by several billion dollars over the next five years.

Other projects are still in the works, however. One example is the work by ConocoPhillips at CD5 near the Alpine field.

Mining

With the decline in gold prices, no major projects are on the docket at Fort Knox, says Anna Atchison, community and government affairs manager. Work is continuing on the heap leach facility at the gold mine twenty-five miles northeast of Fairbanks, and some exploration projects are underway.

At Sumitomo's Pogo Gold Mine, eighty-five miles southeast of Fairbanks, work continues to develop the newly discovered East Deep ore body. The mine is planning to spend about $10 million on exploration this year, says public affairs director Lorna Shaw, and another $30 million to $40 million on capital projects.

Work is also continuing on the Bokan rare earth prospect near Ketchikan and the NovaCopper project near the upper Kobuk River, but spending is expected to fall on large-scale projects such as Livengood, Pebble, and Donlin Creek. Donlin...