Lawmakers briefed on gas project

Nenana Basin could see 700 new plant jobs

Posted: Sunday, April 05, 2009

FAIRBANKS - A project to tap into natural gas reserves in the Nenana Basin could result in more than 700 jobs for several years and up to 17 long-term positions to run a power plant.

The project also could generate 10 billion to 15 billion cubic feet of natural gas a year for in-state use, the project developer told lawmakers on Thursday in Juneau.

Developer Jim Mery, a Doyon Ltd. vice president, provided lawmakers on the Senate Labor and Commerce Committee with a project update. James Dodson of Denver-based Rampart Energy Company, a Doyon partner in the Nenana venture, joined Mery. Other partners include Usibelli Energy and Arctic Slope Regional Corporation.

Doyon is hoping to sink a well in a few months in the Nenana Basin, where seismic tests and other data suggest a large amount of natural gas and possibly oil. The partners estimate 1 trillion to 6 trillion cubic feet of gas potential in the 500,000 acre prospect southwest of Fairbanks.

The $15 million test well will be drilled by the Arctic Wolf, a Doyon Drilling rig.

Dodson said if exploration goes as planned, the partners could have a pipeline built to Fairbanks and gas flowing in 2013.

Many in Juneau are looking to Doyon's Nenana work as the possible short-term bridge between a driving need for lower-cost energy and the prospect of an in-state pipeline carrying natural gas from the North Slope to Alaska markets. Such a line could be operational about 2015, although no company has made a solid commitment to the project.

Mery said a large volume isn't necessary for the Fairbanks projects, including a 12-inch pipeline from Nenana to North Pole and on-site power generation feeding Railbelt utilities, possibly by 2012.

A pipeline to North Pole, home of a Flint Hills Resources' refinery and electric generation facilities, would cost about $110 million and could be operational by 2014, he said.

Gas for Southcentral markets also is an option, Mery said.

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