BP selects Texas firm to build Nikiski GTL plant

by The Associated Press

A Texas company has been selected for construction work on a 10-story BP experimental natural gas liquefication plant in Nikiski. Austin Industrial is a Houston-based construction firm with experience building refineries, said BP spokesman Ronnie Chappell.

The construction will amount to about $12 million of the $86 million plant.

Anchorage-based Udelhoven Oilfield Systems Service Inc. will do electrical and instrument work on the project, an $8 million contract. The remainder of the money for the plant will be devoted to the purchase of land in Nikiski, site preparation, engineering and supplies.

BP is building the plant to test new technology developed with Kvaerner, an international engineering firm, that turns gas into a liquid form.

Groundwork is expected to begin in early February, with a peak work force of up to 200 people.

BP turned down three Alaska bids for the project, from VECO Corp., Alaska Petroleum Contractors, and a joint proposal from Conam Construction and Peak Oilfield Service Co.

Chappell said that Austin won the contract because it beat out competitors on the three key points: cost, construction time frame and safety.

BP’s contract with Austin has provisions that require the builder to recruit in Alaska, hire Alaskans when possible and report the numbers of Alaskans on the job to BP. Of the $20 million committed to Austin and Udelhoven, Chappell said, BP expects 90 percent to be expended in Alaska on wages or the purchase of goods and materials.

But some were displeased by BP’s decision to go Outside in awarding the contract.

“There are qualified companies in state to do this. Price is important, safety is important. But what about all this talk about community?” asked Bob Favretto, owner of Kenai Chrysler Center and chairman of the Kenai Economic Development Committee. “I’m really disappointed in BP.”

But state Sen. Jerry Ward, R-Anchorage, said, “If they bring in welders from Houston, I would be concerned. But I can understand if they want a company with extra expertise in building this kind of plant.”