NEWS BULLETIN

June 22, 2006 --- Vol. 12, No. 33June 2006

DOE issues report on future Alaska gas demand

The U.S. Department of Energy has issued a comprehensive report on the likely demand for natural gas in Alaska after 2015, at which time a gas export line from the North Slope and a gas spur line for delivering North Slope gas to Southcentral Alaska may be in operation.

The report, the result of a study by consultants from SAIC (Science Applications International Corp.), looks in detail at the economics of various types of gas usage in the state and provides an objective assessment of the economic viability of that usage.

Using a series of assumptions about factors such as future gas prices, the study determined that demand for gas for residential and commercial use and for electricity generation is expected to continue to grow.

That demand would likely make a 350 million-cubic feet per day spur line delivering dry gas into Southcentral Alaska viable.

The operation of a Southcentral petrochemical industry using NGLs delivered through a larger spur line looks marginally economic but would be subject to some significant uncertainty.

The delivery of large volumes of dry gas to Southcentral Alaska for LNG, GTL or fertilizer production does not appear viable, because the gas would be priced at too high a level for these industrial plants to compete in world markets.

The report is available at the Kenai Peninsula Borough’s Cook Inlet oil and gas web site at http://www.cookinletoilandgas.org/.

Note: For the full story see the June 25 edition of Petroleum News.


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