Commercial Possibilities for Stranded Conventional Gas from Alaska’s North Slope
Purchase on Springer.com
$39.95 / €34.95 / £29.95*
Rent the article at a discountRent now
* Final gross prices may vary according to local VAT.
Stranded gas resources are defined for this study as gas resources in discrete accumulations that are not currently commercially producible, or producible at full potential, for either physical or economic reasons. Approximately 35 trillion cubic feet (TCF) of stranded gas was identified on Alaska’s North Slope. The commercialization of this resource requires facilities to transport gas to markets where sales revenue will be sufficient to offset the cost of constructing and operating a gas delivery system. With the advent of the shale gas revolution, plans for a gas pipeline to the conterminous US have been shelved (at least temporarily) and the State and resource owners are considering a liquefied natural gas (LNG) export project that targets Asian markets. This paper focuses on competitive conditions for Asian gas import markets by estimating delivered costs of competing supplies from central Asia, Russia, Indonesia, Malaysia, and Australia in the context of a range of import gas demand projections for the period from 2020 to 2040. These suppliers’ costs are based on the cost of developing, producing, and delivering to markets tranches of the nearly 600 TCF of recoverable gas from their own conventional stranded gas fields. The results of these analyses imply that Alaska’s gas exports to Asia will likely encounter substantial competitive challenges. The sustainability of Asia’s oil-indexed LNG pricing is also discussed in light of a potentially intense level of competition.
- ASOGCC. (2012). Current oil and gas pools statistics, Prudhoe Bay Unit, Prudhoe Oil Pool. Anchorage, AK: Alaska State Oil and Gas Conservation Commission (ASOGCC). http://doa.alaska.gov/ogc/annual/current/18_Oil_Pools/Prudhoe%20Bay%20-%20Oil/Prudhoe%20Bay,%20Prudhoe%20Bay/1_Oil_1.htm. Accessed October 9, 2012.
- Attanasi, E. D., & Freeman, P. A. (2009). Economics of undiscovered oil and gas in the North Slope of Alaska: Economic update and synthesis. US Geological Survey Open-File Report 2009–1112. http://pubs.usgs.gov/of/2009/1112. Accessed January 3, 2013.
- Attanasi, E. D., & Freeman, P. A. (2013a). Meeting Asia’s future gas import demand with stranded natural gas from central Asia, Russia, Southeast Asia, and Australia. SPE Economics and Management, 5(2), 1–14. SPE 162870.
- Attanasi, E. D., & Freeman, P.A. (2013b). Role of stranded gas in increasing global gas supplies. US Geological Survey Open-File Report 2013–1044. http://pubs.usgs.gov/of/2013/1044. Accessed May 22, 2013.
- BP. (2012). BP Statistical Review of World Energy 2012. London: BP. http://www.bp.com/statisticalreview/ Accessed August 31, 2012.
- Bureau of Ocean Energy Management. (2011). Assessment of undiscovered technically recoverable oil and gas resources of the Nation’s Outer Continental Shelf, 2011. BOEM Fact Sheet RED-2011-01a. http://www.boem.gov/uploadedFiles/2011_National_Assessment_Factsheet.pdf. Accessed May 22, 2013.
- Chem Systems, Inc. (1989). Methanol production and transportation costs, Technical Report 3 of Assessments of Costs and Benefits of Flexible and Alternative Fuel Use in the US Transportation Sector. Report No. DOE/PE-003P. Washington, DC.
- Durr, C., Coyle, D., Hill, D., & Smith, S. (2005). LNG technology for the commercially minded. In Proceedings of the 21st International Exhibition and Conference for the LNG, LPG and Natural Gas Industries, 14–17 Mar 2005, Bilboa. London: Gastech. http://www.kbr.com/Newsroom/Publications/technical-papers/LNG-Technology-for-the-Commercially-Minded.pdf. Accessed June 8, 2012.
- Energy and Environmental Analysis. (1988). Costs of LNG imports into the United States. Strategic Analysis and Energy Forecasting Division, Gas Research Institute, GRI Contract #5087-800-1474, Washington, DC.
- Energy and Environmental Analysis. (1993). Development costs of undeveloped nonassociated gas reserves in selected countries. Technical Report 9 of Assessments of Costs and Benefits of Flexible and Alternative Fuel Use in the US Transportation Sector, Report No. DOE/EP-003P, Washington, DC.
- Energy Information Administration. (2011a). International energy outlook 2011. DOE/EIA-0484. Washington, DC: Energy Information Administration.
- Energy Information Administration. (2011b). World shale gas resources—An initial assessment of 14 regions outside the United States. Washington, DC: Energy Information Administration.
- Energy Information Administration. (2013a). Annual energy outlook 2013. DOE/EIA-0303. Washington, DC: Energy Information Administration.
- Energy Information Administration. (2013b). Natural gas spot and futures prices (NYMEX) series history table [release date May 15, 2013]. Washington, DC: Energy Information Administration. Downloaded May 16, 2013 from http://www.eia.gov/dnav/ng/ng_pri_fut_s1_m.htm. Accessed May 16, 2013.
- ESRI. (2011). World physical map. Redlands, CA: ESRI. http://www.esri.com/software/arcgis/arcgis-online-map-and-geoservices/map-services. Accessed August 7, 2011.
- Gazprom. (2012). Eastern gas program. Gazprom website. http://www.gazprom.com/about/production/projects/east-program/. Accessed May 24, 2012.
- IHS Inc. (2008). International petroleum exploration and production database. Englewood, CO: IHS Inc.
- IHS Inc. (2008b). QUE$TOR petroleum field development and production cost software, ver. 9.6. Englewood, CO: IHS Inc.
- Inajima, T. & Okada, Y. (2011). Nuclear promotion dropped in Japan energy policy after Fukushima. Bloomberg News website. October 27, 2011. http://www.bloomberg.com/news/2011-10-28/nuclear-promotion-dropped-in-japan-energy-policy-after-fukushima.html. Accessed November 19, 2012
- International Gas Union. (2009). Wholesale gas price formation—A global review of drivers and regional trends. Oslo: International Gas Union (IGU). Downloaded July 31, 2012 from http://www.igu.org/igu-publications. Accessed July 31, 2012.
- Jensen, J. T. (2012). Regulatory hurdles, economics cloud prospects for US LNG exports. Oil and Gas Journal, 110(8), 92–97.
- Ledesma, D. (2008). Southeast Asian and Australian supply to Asia. In J. P. Stern (Ed.), Natural gas in Asia (2nd ed., chap. 7, pp. 279–329). Oxford: Oxford University Press.
- Linde Corporation. (2012). LNG technology. Linde website. http://www.linde-engineering.com/en/process_plants/liquefied_natural_gas/index.html. Accessed December 6, 2012.
- Loy, W. (2012, Aug 6). Point Thomson progress (p. 1) Anchorage, AK: Petroleum News.
- Narusawa, D. & Yamawaki, T. (2012, Nov 5). Japanese firms plan 1,400-km gas pipeline from Russia’s Sakhalin. Tokyo: The Asahi Shimbun.
- Natural Resources Canada. (2013). Energy sector—Energy sources—Canadian natural gas—Monthly market update—Historical data. Ottawa: Natural Resources Canada. http://www.nrcan.gc.ca/energy/sources/natural-gas/monthly-market-update/1173. Accessed May 16, 2013.
- Nehring Associates, Inc. (2010). Significant oil and gas fields of the United States database [data current as of December 2008]. Colorado Springs, CO: Nehring Associates, Inc.
- Nelson, K. (2012, May 6). TransCanada AGIA focus shifts to LNG (p. 14). Anchorage, AK: Petroleum News.
- Rice, D. D., Law, B. E., & Clayton, J. L. (1993). Coal-bed gas—An undeveloped resource. In D. G. Howell (Ed.), The future of energy gases (pp. 389–404). US Geological Survey Professional Paper No. 1570. Reston, VA: US Geological Survey.
- Smith, C. E. (2011). Special report—Pipeline construction plans continue despite growth in natural gas. Oil & Gas Journal, 109(6), 110–121.
- Statoil. (2012). Statfjord late life. Statoil website, http://www.statoil.com/en/OurOperations/ExplorationProd/ncs/statfjord/StatfjordLateLife/Pages/default.aspx. Accessed September 26, 2012.
- Thomas, C. P., North, W. B, Doughty, T. C., & Hite, D. M. (2009). Alaska North Slope oil and gas—A promising future or an area in decline? Addendum Report. National Energy Technology Laboratory [Report] DOE/NETL-2009/1385. http://www.netl.doe.gov/technologies/oil-gas/publications/AEO/ANS_Potential.pdf. Accessed October 10, 2012.
- TransCanada. (2007). Application for license—Alaska Gasline Inducement Act, Public application and appendices. Calgary, AB: TransCanada Pipelines Limited. http://gasline.alaska.gov/background_info/application_docs.html. Accessed November 19, 2012.
- TransCanada. (2010). The Alaska pipeline project files open season plan with FERC- first in the history of the North Slope. Calgary, AB: TransCanada Pipelines Limited. http://www.transcanada.com/5102.html. Accessed November 19, 2012.
- US Geological Survey. (2012). National oil and gas assessment webpage. US Geological Survey. http://energy.usgs.gov/OilGas/AssessmentsData/NationalOilGasAssessment.aspx. Accessed October 10, 2012.
- US Geological Survey World Energy Assessment Team. (2000). US Geological Survey world petroleum assessment 2000—Description and results. US Geological Survey Digital Data Series DDS-60. http://pubs.usgs.gov/dds/dds060. Accessed January 3, 2013.
- White, B. (2012). Asian LNG buyers push back on high prices. Office of the Federal Coordinator, Alaska Natural Gas Transportation Project. September 28, 2012. http://www.arcticgas.gov/asian-lng-buyers-push-back-high-prices. Accessed November 5, 2012.
- Wolfram, C., Shelef, O., & Gertler, P. (2012). How will energy demand develop in the developing world? Journal of Economic Perspectives, 26(1), 119–138. CrossRef
- Wood Mackenzie Research and Consulting. (2012). Wood Mackenzie says East Africa faces technical and commercial challenges to bring 100 TCF of discovered gas to market. Edinburgh, UK: Wood Mackenzie, August 22, 2012. http://www.woodmacresearch.com/cgi-bin/wmprod/portal/corp/corpPressDetailOpen.jsp?pass=10742819. Accessed September 3, 2012.
- World Bank. (2013). World Bank monthly world prices of commodities (pink sheet). http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTDECPROSPECTS/0,,contentMDK:21574907~menuPK:7859231~pagePK:64165401~piPK:64165026~theSitePK:476883,00.html. Accessed May 16, 2013.
- Commercial Possibilities for Stranded Conventional Gas from Alaska’s North Slope
Natural Resources Research
- Print ISSN
- Online ISSN
- Springer US
- Additional Links
- Stranded gas
- gas markets
- resource costs
- Industry Sectors