Marketing Alaska’s gas, coal gasification subject of meeting

Posted: Thursday, April 13, 2006

Royal Dutch Shell has expressed interest in marketing Alaska’s share of natural gas from the proposed Alaska natural gas pipeline and indicated the company would soon submit an independent proposal to the state to market its gas.

Shell is one of the largest transporters and marketers of natural gas in the world.

“One of the key features of the gas pipeline contract is that the state will take its gas in kind. While this provides significant financial benefits to the state, some have expressed concern about the state’s capacity to market that gas,” said Gov. Frank Murkowski, who met with Shell Executive Director of Exploration and Production Malcolm Brinded when the two met in The Hague, Netherlands on Tuesday.

“It is of tremendous value to have a worldwide industry leader and expert in gas marketing and transportation such as Shell express interest in marketing the state’s gas.”

Shell’s emerging presence in Alaska and the company’s potential role in marketing Alaska’s vast resources of coal and natural gas were the subjects of the meeting.

The governor also requested that Shell appoint a team of experts to evaluate a syngas project proposing the use of Beluga coal. Syngas could provide feedstock for Agrium’s Kenai nitrogen facility and could be used to provide gas to the Marathon and ConocoPhillips LNG plant, which faces contract renewal in 2009.

Further benefits from the project could be the development of a large coal co-generation plant for power or the reinjection of CO2 from the coal syngas back into Cook Inlet wells to maintain production.

Syngas also can be used to create synthetic petroleum, which could be exported or used in Alaska. The Taiwanese government has expressed an intense interest in this process because of their dependence on imported petroleum.

The state will create a team to begin detailed examination of a syngas project with Shell and other interested parties.

“Every effort must be made to ensure the continued operation of the two Kenai area plants, which are major employers,” Murkowski said. “We have the resource — coal — and the promise of technology to fully unlock the potential of that resource to benefit Alaskans.”

A detailed discussion was held on the development of hydrogen as a clean, sustainable source for power generation in rural areas. Iceland is using hydrogen on some buses and cars and will be supplying it to fishing vessels.

A prototype currently is operational in a village in Norway. A wind turbine provides the power to produce the hydrogen which is then stored and powers two 600 kW fuel cell generators.

“This technology has the potential to be of tremendous benefit to our rural regions,” Murkowski said. “With the high cost of energy in rural Alaska, it is critical that we fully explore alternative sources of energy.”

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