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MEET ALASKA 2005: Alaska gas potential looking better and better, says USGS
From Petroleum News staff reports
While most observers are eyeing promising developments in Lower 48 gas markets, some scientists and gas explorers see a world of opportunities in undiscovered natural gas reserves in remote Alaska.
To date, the largest known gas reserves on the North Slope are associated with oil and found near the coast within 25 miles of the Barrow Arch, the biggest being the gas cap at the Prudhoe Bay oil field, which contains a whopping 24 trillion cubic feet of gas. The second largest is the 8 tcf at the Point Thomson field, which also hugs the coast.
Still, there is a lot the federal government and the oil and gas industry do not yet understand about Alaska’s geology, U.S. Geological Survey geologist David Houseknecht told a committee of Alaska lawmakers last summer. And what the federal agency is finding in its latest assessment has its scientists “puzzled,” he said. NPR-A could hold major gas reserves The USGS estimate for northern Alaska’s undiscovered technically recoverable natural gas could jump from 150 tcf to 211 tcf, according to Houseknecht. He also said the increase could be much larger because of public information gleaned from recent discoveries in the National Petroleum Reserve-Alaska. That information could lead to an increase in the government’s NPR-A gas estimate, which currently sits at 61.4 tcf.
Bidding at NPR-A lease sales over the last five years indicates “industry believes there is significant potential extending westward across NPR-A,” he said.
Although industry has been interested in the Alpine play area’s oil potential, which is thought to contain more than 2 billion barrels of recoverable crude in NPR-A’s northeast corner, recent NPR-A discoveries indicate the play might also have significant gas potential, Houseknecht said.
Starting at the Alpine field and moving a few miles west to the Spark and then the Rendezvous oil discoveries, “there is an astoundingly rapid increase in the gravity of oil and the GOR over a very short lateral distance.”
For example, oil in the 500-million-barrel Alpine field has 40 degree API gravity. API gravity is the American Petroleum Institute’s measure for the lightness or heaviness of oil. Alpine oil is very light and fluid, as opposed to thick, molasses-like oil. The GOR, or gas-to-oil ratio, at Alpine is 840. The GOR of a well, or field, is the number of cubic feet of gas it produces per barrel of oil. Houseknecht said 840 is a very low value.
A test of oil in the Spark discovery to the west indicates 55-degree API gravity, much lighter than at Alpine, and probably a condensate, a petroleum compound that is a gas in the reservoir and transforms into a liquid at the surface. (Condensate is almost pure gasoline and is generally 45 to 62 degrees API. Refiners pay almost as much for condensate as crude oil.) Spark’s GOR is 10,200.
Farther west, the Rendezvous discovery reported even lighter hydrocarbons with 60-degree API gravity and a GOR of almost 17,000, Houseknecht said.
These rapid increases, Houseknecht said, lead to the question, “Is the big play, or plays, in NPR-A really going to be predominantly oil or will there be a very substantial gas resource that has perhaps already been discovered, or is waiting to be discovered?” Copper River find could spur gas line development Midland, Texas-based Rutter and Wilbanks Corp. recently announced plans to drill a single gas exploration well near Glennallen this winter. It will be the first well in Alaska’s undeveloped Copper River basin since Copper Valley Machine Works drilled the Alicia No. 1 well in 1983.
The company plans to drill in February to a depth of 7,500 feet. It will be the deepest well ever drilled in the region. “We hope to take a look at some rocks no one’s ever drilled out there before. We’ll be drilling down into the Jurassic, which could offer new potential. … We hope to find what we’re looking for and something more,” Rutter and Wilbanks executive Bill Rutter III said Dec. 21.
Rutter hopes a major gas discovery will “stimulate the North Slope spur line concept” and convince the state to first build a section of the line from Glennallen to Palmer to get Copper River gas into the Enstar system for Southcentral Alaska. “That could eventually lead to a spur line north to tap into a North Slope gas pipeline.
A pipeline from Glennallen to Anchorage via Palmer will cost $60-$70 million, Rutter said, and “that’s just one option. Taking it to an LNG facility in Valdez is another or building a gas-to-liquids plant.”
The price tag on the pipeline seems like a lot of money, he said, “but if you find 200 bcf of gas, and it’s the only way to get it out of there, then that’s what you do.” Gas authority sees spur line potential Alaska Natural Gas Development Authority CEO Harold Heinze shares Rutter’s vision.
“We are interested in building a spur line to bring gas into Southcentral Alaska. Ballot 3 directed us to look at the economic viability of such a line. Basically we found it was not only highly desirable but, given the gas situation in Cook Inlet, a priority.”
Rutter was surprised ANGDA would consider building a line north to Glennallen, Heinze said
“Our plan is based on getting North Slope gas to Southcentral. The Palmer to Glennallen stretch gets you to the TAPS right of way and if you go northward you can intercept” the North Slope gas pipeline. “If they (Rutter and Wilbanks) found something of significance it is a fit with what might happen,” Heinze said.
Currently ANGDA is “aiming just slightly north of Glennallen. We’re preparing applications to the state for the right of way that links Glennallen to Enstar’s system in the Palmer area. … If a North Slope pipeline is built to Valdez that’s where we’d hook up but if the line (goes through Canada, which is the route preferred by North Slope gas owners), we’d have to go north another 140 miles with a spur line to Delta Junction,” he said.
Glennallen to Palmer is the “only piece of the puzzle where a right of way doesn’t exist. Our contractors are starting work on it right after first of the year. We should have our applications into the state of Alaska by April 1,” Heinze said. Nenana Basin: A hot spot for gas? Andex Resources said Dec. 20 that it has signed agreements with investors to explore for natural gas in Interior Alaska’s Nenana basin.
Investors include Usibelli Energy, an affiliate of Usibelli Coal Mine of Healy, Alaska, and two Native regional corporations, Fairbanks-based Doyon Ltd. and Barrow-based Arctic Slope Regional Corp.
Under the agreement Andex, which has offices in Houston and Denver, will continue to be the operator of the project, and, according to Usibelli Vice President Steve Denton, continues to own “the lion’s share of the project.”
Andex said an exploration program is planned to assess the natural gas resources of more than 500,000 acres it has under lease through both an exploration license and leases from the state of Alaska, the Mental Health Lands Trust and Native regional corporation Doyon Ltd.
“Completion of approximately 218 miles of 2D seismic line is scheduled for the winter of 2004-05. Results of the seismic program are expected to identify potential drilling targets for future exploratory wells,” Andex said in a statement.
Andex has said it hopes to find commercial quantities of natural gas in the Nenana basin for delivery to Fairbanks and possibly Anchorage.
Editor’s note: See related story on gas hydrates in this section.
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