Borough assembly may promote Nikiski terminus

Hearing scheduled Nov. 16 to consider $100,000 promotional fund for Kenai Peninsula destination for trans-Alaska gas pipeline

by The Associated Press

Natural gas could surpass oil in its importance to Alaska’s economy over the long term, according to a prominent Lower 48 oil-industry analyst.

“You have a huge resource that’s not being produced because there is not an economical way to get it to market,” said Kate Warne, senior energy analyst for the St. Louis-based brokerage firm Edward Jones. “If gas-to-liquids or a liquefied natural gas process can be set up, that creates long-term cash flow.”

The worldwide market for gas is more favorable than the market for oil, and gas is a clean source of energy, said Warne during an October visit to the Kenai Peninsula.

As more countries develop, more add the infrastructure to substitute natural gas for coal, so eventually producing North Slope gas will pay off, she said.

BP Amoco spokesman Ronnie Chappell said that if the company’s pending takeover of Atlantic Richfield Co. is approved, North Slope gas will be the company’s largest undeveloped resource.

“Gas is going to be a major focus for BP,” Chappell said.

BP plans to build a $70 million experimental gas-to-liquids plant, which would use a chemical process to convert gas to a diesel-like fluid that could be shipped through the trans-Alaska oil pipeline.

Another possibility is construction of an 800-mile gas pipeline and a tidewater plant to cool it into liquefied natural gas. The Alaska North Slope LNG Project, an industry group exploring ways to develop North Slope gas, is considering two pipeline routes — one to Valdez and the other to Cook Inlet.

The Kenai Peninsula Borough Assembly has scheduled a public hearing Nov. 16 on a proposal to spend $100,000 to promote a Nikiski pipeline terminus.