BP to close Nikiski research facility

Posted: Wednesday, September 02, 2009

BP Exploration Alaska announced Wednesday that it plans to close the gas-to-liquids research facility in Nikiski by the end of the year.

Steve Rinehart, a spokesman for BP in Anchorage, said the 15 BP employees currently working at the facility will be offered other positions with the company. He anticipates those to be North Slope jobs.

BP wrote in its press release Wednesday that it has 250 employees who live on the Kenai Peninsula, most of whom work on the slope.

Rinehart said there are about 10 contractor positions at the facility as well. Their future is less certain.

"There will be some work continuing as we secure the facility, but beyond that we're not offering them specific jobs," he said.

BP is calling the closure a successful conclusion to the research being conducted on the conversion of natural gas to diesel and jet fuel.

"It was not intended to be a facility that would carry on indefinitely into the future. We had research that we wanted to conduct. As we learned more, we added onto that. It's been very successful," Rinehart said.

BP announced it would start a research project in Nikiski in June of 2000. Natural gas first entered the operation in 2002.

Rinehart said the facility came close to closure in 2005, however, the corporation developed new research opportunities.

The thrust behind the original project was to establish a commercially viable process for converting natural gas into liquid fuel products.

"This was a real production test scaling up from more laboratory-sized tests, up to the kind of plant that you would make if you were going into production," he said.

Rinehart explained that converting natural gas to liquids has been commercially appealing to petroleum producers.

"It's a way to get gas that is otherwise not close to a market or is not commercially viable as natural gas, and convert it to a product that is viable," he said.

The GTL process has become increasingly of interest to some producers as liquid fossil fuel reserves have decreased.

At its peak, Rinehart said the Nikiski project was taking 3 million cubic feet of Cook Inlet natural gas a day and producing about 300 barrels of product, which was sold to the Tesoro refinery.

Rinehart said there was never a long-term plan for the facility.

"This was not a production scale plant," he said.

The current status of operations at the facility was not immediately available, but Rinehart said the shutdown process will continue through this fall, with clean-up and removal of hydrocarbon products extending into early 2010.

Rinehart said BP doesn't plan to use the facility for any other projects after this.

"We don't have any plans to use it for anything else. Our plans are to close it, clean it, make its safe and secure, and the final disposition is a decision we will make in the middle of next year," he said.

Dante Petri can be reached at dante.petri@peninsulaclarion.com.



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