Reasons to Get Excited About Alaska’s Economic Future
The economic recovery that we have all been waiting for in Alaska is finally on the immediate horizon. With oil prices hovering around $70 per barrel and significant new discoveries on the North Slope, oil production is up and is projected to continue to grow.
Here is a look at some of the projects that are causing such optimism for the economic future in Alaska:
- Alaska LNG Project The $45 billion Alaska Gasline Development Corporation LNG project has a target completion sometime between 2023 and 2025, with construction between 2021 and 2022.
- Nanushuk Project This Oil Search Alaska project is currently in the EIS stage with initial production targeted for 2021. It has 1.2B barrels of proven recoverable reserves and an expected peak production estimated at 120,000 BPD.
- Liberty Project (Hilcorp, BP, and ASRC Exploration) This offshore project has construction costs estimated at more than $1 billion. Estimated reserves of 80M to 150M barrels of oil with peak production estimated at between 60,000 to 70,000 BPD. Final EIS and ROD is expected in Fall of 2018.
- Smith Bay Discovery This Caelus Energy project is a massive 6B to 10B barrel deposit capable of adding 200,000 BPD into the Trans Alaska Pipeline System.
- Nuna Project This Caelus Energy project is a 75M to 150M barrel discovery just east of the Colville River.
- Oooguruk Project This Caelus Energy project is a 100M to 150M barrel development on a man made island in Harrison Bay in the Beaufort Sea.
- Greater Moose’s Tooth 1 & 2 ConocoPhillips expects production of 30,000 BPD to come online in late 2018 at peak production. GMT-1 is located within NPR-A. GMT-2 is a $1.5 billion project that could begin construction in the winter of 2018/2019 with first oil planned for late 2021.
- Willow Project ConocoPhillips announced its Willow Project in NPR-A contains an estimated 300M barrel reserve of oil with production estimated up to 100,000 BPD. Production is estimated to start as early as 2023 pending permit approvals, with this project currently in the pre-EIS stage.
- Western Blocks This project is led by 88 Energy from Australia as they look to extend the Nanushuk play. Plans for drilling are to commence in March 2019 with an estimated deposit of a 400M barrel discovery.
- Project Icewine Another 88 Energy project, this has an estimated 3.6B barrel reserve of shale oil and 750M in conventional oil.
- Milne Point Milne Point is a reserve estimated at somewhere between a 30M and 50M barrels and is part of Hilcorp’s plan to invest $285 million in Alaska in 2018, with more than $100 million of that amount in infrastructure improvements.
- Alaska OCS Beaufort Sea Oil and Gas Lease Sale The Bureau of Ocean Energy Management has announced its 2019-2024 Draft Proposed Program which calls for oil and gas lease sales in 2019, 2021, and 2023. The program has not been finalized, but, if approved, the proposed 2019 Beaufort Sea lease sale would happen in late 2019. The Alaska OCS may be one of the largest untapped oil basins in the world per a 2011 report from Northern Economics and ISER.
- Harvest Alaska – Cook Inlet Pipeline Company In July 2018 the Regulatory Commission of Alaska granted construction permits for a $75 million project to build new onshore and offshore pipelines to transport oil from the east side of Cook Inlet to the Andeavor Refinery by subsea pipeline.
- Eielson Air Force Base and JBER Eielson AFB and its addition of the F-35 Stealth Fighter squadrons is a $1.5 billion project that will help the local population near Fairbanks grow by up to 3,500 people by 2020. Additionally in Anchorage, JBER recently announced plans for a $150 million dollar runway expansion project with completion by 2025.
- Donlin Gold This project was just granted its official Record of Decision in August 2018. Donlin Gold is one of the largest undeveloped gold deposits in the world with probable reserves of 33.8 million ounces of gold. It is projected to produce 1.3 million ounces of gold annually.
- Ambler Access Project This access road for the mining industry has been compared to the impact of the Dalton Highway on the oil industry. This project is preparing for the draft EIS phase.
Good Times are Ahead…
Alaska’s economy is set for a rebound. The Trans Alaska Pipeline System is averaging 543,703 BPD so far in 2018. This is the third consecutive year of oil flow growth, and the trend is expected to continue for the next several years. In fact, North Slope oil production is expected to rise by 40% within the next eight years, according to E&E News. With all of the projects being explored, it should come as no surprise.
Even if your business is not directly in the oil and gas space, you are likely impacted by the health of the oil industry because of the trickle down effect it has on virtually all businesses in Alaska. Businesses will be staffing up, expanding marketing budgets, and purchasing new equipment. Is your business positioning itself to prosper?
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