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Providing coverage of Alaska and northern Canada's oil and gas industry
February 2007

Vol. 12, No. 5 Week of February 04, 2007

Cook Inlet natural gas in a nutshell

In mid-January the Institute of Social and Economic Research released a summary of the 2006 Southcentral Energy Forum that took place in Anchorage in September.

The summary, sponsored by the Alaska Oil and Gas Conservation Commission, was so well written Petroleum News decided to reprint it.

Because Marathon Alaska business unit manager John Barnes was unable to speak at the forum (invited but unable to accept), we asked Barnes for comments on the summary. Marathon is a major Cook Inlet basin gas producer and explorer, as well as part owner of the Nikiski LNG plant operated by its partner ConocoPhillips.

We also asked other gas producers, explorers and industrial plant owners to comment on the summary. Enstar, for example, provided three graphs that have more recent information than those it had available in September.

The comments, including clarifications and differing opinions, are positioned outside the ISER summary on the pages that follow.

One key topic of concern at the September forum was the question of just how much longer natural gas supplies from existing Cook Inlet fields can continue to meet Southcentral Alaska gas demand. Answering that question depends on the assumptions you make about future gas reserves growth.

In assessing the question we encourage readers of the ISER summary to also read the Department of Energy’s 2004 South Central Alaska Natural Gas Supply and Demand report, authored by Charles Thomas, and DOE’s June 2006 Alaska Natural Gas and Needs Assessment, which the ISER summary appears to draw upon via Thomas’ presentation at the September 2006 forum.

For example, figure 2 in the ISER summary reflects the natural gas supply data in DOE’s June 2006 report, which includes the Division of Oil and Gas’ 2006 proven gas reserves data. According to what Thomas said in his presentation, current proven reserves can be considered conservative estimates of the gas that might be developed.

On page 19 of his presentation materials Thomas shows the curve from DOE’s 2004 report with an assumed future reserves growth in existing fields of 1.4 trillion cubic feet, which moves the critical time for residential, commercial and some industrial users out to about 2025. These points are summarized on pages 22 and 23.

In his presentation Thomas said Cook Inlet reserves growth can be expected to increase significantly as a result of additional drilling in existing fields, adding compression and adding water handling to the platforms.

Add new discoveries to those developments, as illustrated in DOE’s 2004 report, and Cook Inlet could have adequate supplies for residential, commercial and industrial use far beyond 2025.

Email [email protected] for copies of the aforementioned reports and Thomas’ presentation materials.

—Kay Cashman, Petroleum News publisher

To review the Institute of Social and Economic Research's summary of the 2006 Southcentral Energy Forum, please visit http://www.petroleumnews.com/pdfarch/711453248.pdf#page=9.






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