For an oil field in decline, Cook Inlet has been producing some good news.
This week, Forest Oil Corp. announced it struck oil with the first well drilled from the first platform installed in the inlet since 1986.
The new Osprey Platform could produce up to 25,000 barrels of oil per day, almost doubling the inlet's current production of 29,000 barrels a day.
Forest has permits to drill three more exploratory wells. If the second well also proves successful, Forest Oil likely will commit to a $25 million project to build pipelines and onshore facilities to put Osprey into production. Results of the second well are expected in late April or early May.
If all goes well, Osprey could be in production by early next year.
Adding to the good news was BP Exploration (Alaska) Inc.'s announcement that all the necessary permits are in hand and construction has started on the $86 million gas-to-liquids demonstration plant in Nikiski.
Austin Industrial and Udelhoven Oil Field Services Co. now are screening and hiring workers through the Peninsula Job Center. About 50 people will be at work on the project by early March; the total project work force is expected to peak in July at about 200 workers.
Contracts have been awarded to 21 Alaska-based companies for services ranging from preconstruction environmental fieldwork to janitorial services.
The plant will test potential breakthrough gas-to-liquids technology designed to convert methane gas into synthetic crude oil. The Nikiski project is expected to convert about 3 million cubic feet of natural gas into an estimated 300 barrels of synthetic crude a day.
What's most exciting about the GTL project is that this is cutting-edge science happening in our back yard. Alaskans like to talk about adding value to the state's natural resources; the Nikiski project gives a new twist to that talk.
If the GTL experiment proves itself, the technology itself could be exported.
To be able to extract resources is one thing; to be able to help redefine an industry with new processes is quite another.
The Kenai Peninsula is known for its resource-based industries. It would be great to add to its economic repertoire a reputation for being a center for new millennium kinds of science, technology and research connected to already established industries.
Congratulations to Forest Oil on its Osprey oil strike, and best wishes to BP as its breaks ground on its GTL demonstration project. Our hope is that ultimately both Osprey and the Nikiski plant will be considered overwhelming successes.
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