Major operators over the years have come and gone from the nation’s Last Frontier, yielding their hard-won oil and gas assets to another generation of upstream and midstream explorers with other ideas to reap the bounty of Alaska’s prolific natural resources. And the times, boy, are they a-changing.
News from Alaska, and the next-gen players on board to capture the state’s resources, has come steadily over the last few months as major producers back out, sell off, and acquiesce to independents moving into this territory with their own ideas and plans, and expanding their footprint in one of North America’s largest oilfields. But there’s much more activity happening here than new drilling.
Here’s a rundown of the latest energy-related activities and projects either proposed or planned, or already happening, in the Land of the Midnight Sun.
The Alaska LNG Project
This massive undertaking now has won the issuance of rights-of-way permits for the first 230 miles of what will be an 870-mile pipeline to flow natural gas from Prudhoe Bay to a newbuild liquefaction and export terminal southwest of Anchorage. In addition, FERC has granted Alaska Gas Development a 10-year deadline to begin operating both the pipeline and the LNG facility. Upon completion, the Alaska LNG facility will be capable of exporting 20 MTPA. Prudhoe Bay produces on average 3.5 BCFD of natural gas.
Hilcorp Energy and the Prudhoe Siren Song
Among the largest acquisitions this year, Houston-based independent Hilcorp Energy in early July more than doubled down on its oil and gas interests in Alaska with a $5.6 billion acquisition of BP’s upstream and midstream assets. The first part of this megadeal makes Hilcorp the second-largest producer in the state and the key operator of the Prudhoe Bay oilfield. The second part includes a 50% ownership in the 800-mile Trans Alaska Pipeline System.
The New Kid in Town
Australian-based 88 Energy also is betting on Prudhoe Bay with its recent acquisition of the 135,000-acre Peregrine Project on the North Slope, where it looks to drill two, low-cost wells in 2021 with the aim of unlocking the next major oil discovery there. The company intends to explore a farmout deal with other partners, estimating the two wells will cost $15 million. 88 Energy’s Project Icewine includes 480,000 contiguous acres in Prudhoe Bay, as well as the award of 15,312 acres in Yukon Gold.
Speaking of Yukon Gold, the Donlin Project Is Back Apace
Alaska-based Donlin Gold, which looks to mine a parcel of Yukon land consisting of one of the world’s largest known gold deposits, took another step forward earlier this year to construct a massive, integrated mining infrastructure that will include a 315-mile natural gas pipeline. The gas will be used to power mining opeations and eliminate additional barge traffic hauling diesel fuel in the Cook Inlet. The project took a breather in April due to COVID-19 but mining slowly has returned.
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