The Anchorage Chamber of Commerce’s Make it Monday Forum continues to bring important issues to the forefront for the business community. This week, they hosted Karen Hagedorn, Alaska Production Manager, with ExxonMobil for an update on Point Thomson and the Alaska LNG project.
To date, ExxonMobil and its partners BP and ConocoPhillips have spent $2 billion on the project. The project is on target to start up in early 2016. The team is about halfway through the initial production that will establish critical infrastructure that includes housing facilities, expansion of the gravel pad, fuel tanks, an onsite airstrip, and a service pier. There is also a 22-mile export pipeline that will have a capacity of 70,000 bpd at completion. There will be three wells, two on the central pad and one on the west pad, and the total area for the project will be 55 acres. During the summer of 2015, process buildings will be installed at Point Thomson. These buildings are under construction and will be barged to the site next summer.
This past year, there have been about 1,200 people working statewide on the project with 700 positions on the North Slope. 85 percent of these workers are Alaskan. There are 92 companies working directly on the project and 80 percent of those companies are Alaskan. Hagedorn expressed the importance of working with the local companies and hiring Alaskans. She also noted that there are two classes of operators that are currently being trained in Southern California, and Alabama. Both classes are looking forward to escaping the heat and coming back to Alaska to work.
Hagedorn also spoke about the Alaska LNG project. Point Thomson will be an anchor in this project and operators will work closely with the other producers on the North Slope and at Prudhoe Bay. She believes that the future of Alaska energy is gas development.
In order to have a strong future, tax reform is important. The current tax structure that was put in place this past January makes Alaska competitive, predictable and durable for oil and gas development. Alaska is the only state that has seen a decline in production since 2007. Producers indicate that the tax structure under ACES made it very difficult to plan for the long-term. The new structure makes Alaska a much more durable place to do business. The current structure incents production which is more aligned with the business model that production companies use for planning. It is aligned with what the state wants; more production, and what the industry wants; stability and durability. The new structure is already working and needs to be kept in place to allow for further growth and development.
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