Marathon increases spending in Alaska for 2002

ANCHORAGE (AP) -- Marathon Oil Co. plans to increase its capital budget this year in Alaska.

The company plans to spend between $30 million and $35 million. That's up from less than $30 million last year.

The estimate for capital spending this year is not exact because the company does not yet know how much it will spend on the soon-to-be-built Kenai-Kachemak gas transportation line. The line will connect new sources of gas from the discovery at Ninilchik, and other potential prospects, to the Kenai hub.

''In addition, the project will enable Enstar or other local distributors to consider expanding their market areas to supply new customers south of Kenai,'' John Barnes, manager of Marathon's Alaska business unit, told Petroleum News Alaska earlier this month.

He said the amount of money spent on the line depends upon the level of interest shown in contracting for pipeline space.

Marathon and Unocal, its partner in the Kenai Kachemak Pipeline LLC, started the pipeline process late last year. Barnes said $10 million or more could be spent on the pipeline this year.

Barnes said Marathon has been increasing its Alaska staff and spending more for the last several years. Marathon now has 50 full-time employees in Alaska. That's up from 40 employees just a few years ago.

Marathon has been focusing on gas production in the Cook Inlet area. Barnes said the focus is likely to remain the same for the near future, even while the company monitors lease sales and opportunities on the North Slope.

The company currently supplies more than 60 percent of the Southcentral Alaska natural gas market. Marathon operates five gas fields: Wolf Lake, Beaver Creek, Cannery Loop, Kenai and Sterling. Wolf Lake, northeast of Soldotna, came online in November and is the first Cook Inlet gas discovery to be developed since 1979.