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Forest Oil proposes Cook Inlet, North Slope GTL plants Company wants Congress to include synthetic diesel within alternative fuels under Energy Policy Act, help support gas-to-liquids plant construction Kristen Nelson PNA News Editor
Forest Oil of Denver, which expects to close on its purchase of Forcenergy Inc. around Nov. 1, is planning gas-to-liquids plants in Cook Inlet and on the North Slope to commercialize natural gas as synthetic diesel and is looking for both legislative and financial help from the federal government.
Gary Carlson, vice president of operations for Forcenergy in Anchorage, told the Senate Committee on Energy and Natural Resources, Sept. 14 that he was speaking on behalf of Forest Oil, Forcenergy and Alaska Natural Gas to Liquids Co.
In the near term, Carlson said, Forest Oil “will develop and explore acreage in the Cook Inlet” where Forcenergy recently spent $35 million to install the Osprey, a new generation drilling and production platform.
“Forest Oil, along with ANGTL, Dresser Engineering, and Rentech, is exploring feasibility of a 12,000-barrel per day gas to liquids plant in the Cook Inlet. Lastly, we are looking at a 50,000-barrel per day gas to liquids plant to recover North Slope gas,” Carlson said. ANS gas to GTL Carlson said that Forest Oil believes that in the near term GTLs “offer the greatest potential for developing North Slope gas reserves without adversely affecting ultimate oil recovery.”
Once a stable gas market is established in the Lower 48, Carlson said, “we agree that a large diameter gas pipeline will be needed to fully develop the enormous gas potential of Alaska.”
Alaska natural gas would be used to produce synthetic diesel for West Coast markets. The Cook Inlet commercial 12,000 barrel a day plant would be a first step. “The Cook Inlet GTL plant could be online within two years,” he said.
The ANGTL Group will include: Forest Oil; the ANGTL Co.; an Alaska Native group; and a South African company with expertise and experience in the operation of natural gas fed GTL plants. Carlson said Mossgas has been chosen as operating advisor because its GTL plant in South Africa is the only GTL plant in the world with full international environmental ISO 14001 accreditation.
He said that Forest Oil, along with Anschutz Investment Co., has a significant position in Rentech, a Denver based GTL technology provider, the developer and licensor of a patented and proprietary Fischer-Tropsch gas to liquids process. Where Congress needs to help The 50,000 barrel per day North Slope GTL plant is estimated to cost $2.7 billion, Carlson said, including additional tankage on the North Slope, modifications to the trans-Alaska pipeline to allow for batching and tankage modifications at Valdez.
Carlson said Congress should consider explicitly recognizing GTL produced synthetic diesel as an alternative fuel under the Energy Policy Act of 1992. If Congress explicitly recognized GTL as an alternative fuel, he said, it “would increase the market for synthetic diesel for both the Cook Inlet plant and the proposed ANGTL plant.”
For the ANGTL plant — the larger plant proposed for the North Slope — the goal, Carlson said, “is to obtain appropriate federal participation commensurate with the public benefits…”
That participation, he said, “is needed to ensure that GTLs in Alaska can be competitive with GTLs from other parts of the world.”
Project timing would be dependent upon federal assistance, which the companies hope to have in place by the end of 2001.
Preliminary feasibility studies performed in late 2000 and early 2001 for the Cook Inlet plant would provide the basis for engineering and environmental studies for the North Slope plant, which would begin in late 2001.
Kenai construction could begin in 2001 with the plant in service by early 2003. Construction of the North Slope plant would begin in 2003 with an in service date of late 2006 or early 2007.
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