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Gas now one of four main corporate focus areas for BP Amoco Gas business unit being added to Alaska operation; LNG, GTL, other options will all be pursued; goal is commercialization of resource Kristen Nelson PNA News Editor
Gas is of increasing importance to BP Amoco and BP Exploration (Alaska) Inc., with gas now a fourth focus area added to the company’s traditional upstream, downstream and chemical, and a gas business unit being added in Alaska.
Ken Konrad, BP Exploration (Alaska)’s newly named Eastern North Slope business unit leader and the integration team leader for the BP-ARCO merger effort, told PNA Aug. 6 that the Alaska focus on gas is more than just the gas technology group relocating to Anchorage.
Dave McManus will be coming from ARCO UK to run a new gas business unit and Konrad said the integration team has been working closely with McManus to design the unit and identify the activities and people who will drive it.
Gas a major BP Amoco focus First, Konrad said, it’s important to realize that gas has become a major focus for the corporation. BP Amoco has said it sees “the mix of fuels in the world going increasingly toward lighter fuels” with gas playing a major role, he said.
It’s important to note, he said, that “over the last couple of months we’ve added a fourth business stream corporately.
“Historically we’ve been upstream, downstream — being marketing and refining — and chemicals. Those are the three legs of the stool. We have recently added a fourth business stream called gas, which I think is an indicator of how important gas is to BP corporately.”
The corporation’s gas portfolio grew significantly with the merger with Amoco, Konrad said, and will grow even more with the merger with ARCO.
Alaska gas resource significant The North Slope gas resource is huge, Konrad, said — noting that it was found while looking for oil — “no one’s even started looking for gas,” he said.
When it combines with ARCO, BP will become the largest owner of gas on the North Slope and ANS will be the largest undeveloped gas resource in the BP Amoco portfolio. BP’s share of Prudhoe Bay gas — including the gas cap and the gas dissolved in the oil rim — is now 23 percent and with ARCO’s 38 percent added, BP will control more than 60 percent of the Prudhoe Bay gas resource.
The goal, Konrad said, will be to figure out a way to monetize, commercialize, that enormous resource. Initially, he said, there will be a two-pronged effort: the $70 million pilot gas-to-liquids plant which BP plans to build on the North Slope and continuing the work of the liquefied natural gas sponsor group.
In the LNG arena, Konrad said, “BP Amoco has installed the lowest cost LNG facility in the world — has installed it and is operating it. That’s the facility in Trinidad.” BP Amoco will bring what it has learned at that facility to Alaska.
While gas commercialization is a monumental challenge, he said: “I think if you look at BP globally …never before have so many resources, both technology, be it gas-to-liquids, lowest-cost LNG producer, large resource owner, strong financial player — all key aspects to successful gas development — I’m not sure before we’ve had so many of those components under one roof before.”
Gas technology center In addition to the Alaska gas business unit, Konrad said, “we’ll also be relocating our gas technology center of expertise to Alaska.” That group, part of the corporation’s upstream technology group, has a global responsibility, he said, and the 25 or so highly specialized gas experts will be working on Alaska gas, but also supporting the corporation’s global gas business units “in terms of applying the best technology and also making sure that the best technology from around the world is being brought to Alaska.”
“So that technology group is more of a global group than purely a local group. Which is good for Alaska, when you bring people with this sort of horsepower into the community, there are probably derivative benefits as well.”
Multiple areas of focus In addition to LNG and GTL, Konrad said, “I think we’ll even be looking at other possibilities, frankly, some of them we haven’t even identified yet.
“But,” he said, “it’s certainly interesting to note that Canada continues to build its pipeline infrastructure farther north and we indeed are developing some interesting high-pressure gas pipeline technologies that are interesting — either for an LNG project — or who knows? There’s a lot of gas. I think there’s a lot of options.
“And indeed,” Konrad said, “ultimately we may see ourselves using one, two, three or more options. Who knows? They’re not mutually exclusive by any stretch.”
The motivation, he said, is to make North Slope gas development economic.
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