Shipping from the Slope: Qilak LNG moves forward with plans to get stranded Point Thomson gas to market.

• Author: Kay, Alexandra
• Position: OIL & GAS

Point Thomson, located on Alaska's North Slope 60 miles east of Prudhoe Bay, has an estimated 8 trillion cubic feet of natural gas and 200 million barrels of natural gas condensate, approximately one-quarter of the total projected gas available on the North Slope. That gas has been "stranded" for more than forty years by the economic and physical realities of bringing it to market via either the construction of a pipeline hundreds of miles long or the need to ship it across arctic waters.

When crude oil is produced in Alaska, it is usually accompanied by gas, which is generally reinjected back into the ground. This is a benefit if a field needs additional pressurization.

But "this is an especially difficult problem for Point Thomson because the pressure of that particular field is so high that reinjecting the gas is cumbersome." says Christine Resler, president and CEO of ASRC Energy Services. "Having the ability to export the natural gas makes the economics of Point Thomson significantly more attractive."

Qilak seeks to capitalize on that fact, says Qilak Chairman and CEO Mead Treadwell, former lieutenant governor of Alaska. "We believe we're competitive by starting first with a field that benefits from gas production on the oil production side, but also by starting with a small enough quantity that the risk in the marketplace is less."

There are currently two proposed plans to bring natural gas reserves at Point Thomson (which began operations in 2016) to market: an 800-mile pipeline or, as proposed by Qilak LNG, directly exporting the gas from Alaska's North Slope to Asian markets via icebreaking ships.

In October 2019, Qilak LNG signed a Heads of Agreement with ExxonMobil to reserve at least 560 million cubic feet of natural gas per day for the proposed Qilak LNG North Slope project.

Initially the proposed project would have an export capacity of 4 million tons per year over a twenty-year term, using an off-shore liquefaction plant to process the gas into liquefied natural gas (LNG) before it would be loaded into icebreaking LNG carriers to take it to its final destination.

Qilak had already conducted a pre-feasibility study of its proposal, supported by Aker Arctic, which specializes in development, design, engineering, consulting and testing services for ice-going vessels, icebreakers, offshore marine structures, marine transport solutions, and ports.

The study examined the company's plan to pipe gas a few short miles from Point...