The official magazine of the Alaska Support Industry Alliance Alaska Oil & Gas Historical Society Celebrates 50th Anniversary of First Pipe at Tonsina in New Exhibit FUELING PROSPERITY FOR THE NEXT 50 YEARS INSIDE THIS ISSUE: n Bevy of Activity Continues on Slope n Pair of Facilities Set to Import LNG n Thank You to Our Meet Alaska Sponsors!
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Alliance Members and Friends: Welcome to Meet Alaska 2025 — our 41st annual energy conference, to bring our membership, natural resource developers and featured guests together for a day of education, networking and camaraderie. Important topics include natural gas development with the prospects of AKLNG beginning a FEED phase in 2025 and two potential options for Cook Inlet natural gas imports. One, all or some combination of these projects will surely come to fruition. One of The Alliance policy issues for 2025 is security of gas supply for the Cook Inlet, whether that be from new drilling, a gas pipeline from the North Slope or imported LNG. It is vital to our state that we find a solution for the looming natural gas shortfall. A contingent of Alliance Board members recently returned from Juneau, where we spent two days meeting with legislators and state officials. This was my second time as part of The Alliance representation in Juneau and I was again amazed as how much recognition and respect The Alliance has within our legislature. While not all lawmakers are on the same side as The Alliance and what we stand for, they all know who we are and the number of Alaskan companies and Alaskan people we represent. Another legislative session and two new oil tax bills were introduced, which the Alliance is opposing. SB 92 is targeting a tax on S-corporations that produce oil & gas and make over a certain dollar amount. Only one company meets this critera, Hilcorp. SB 112 (introduced while we were there) is proposing to reduce the per barrel credit for new oil from $8 to $5 a barrel. This is well after ConocoPhillips and Santos made final investment decisions for Willow and Pikka, respectively. The current tax regime has been in place for 11 years and has been the prime driver in the new North Slope development projects, which are expected to add over 250,000 barrels per day to TAPS and increase future state revenues. We will fight against both bills and work to keep Alaska’s investment climate stable. Many Alliance board members will attend Meet Alaska, so if you have any questions or want to know how you can participate with The Alliance, please seek us out and ask. Enjoy the conference! Respectfully, Jeff Welcome to Meet Alaska! Thank you for your support Message From Jeff Baker, Board of Directors President THE LINK: MARCH 2025 4 Connect with The Alliance We are working proactively to keep our members informed and connected via online platforms and events. Watch for our updates through email and social media. LinkedIn: www.linkedin.com/in/the-alliance-4939251b Facebook: www.facebook.com/alaskaalliance X (formerly Twitter): x.com/AKAlliance And if you’re not receiving our updates, email info@alaskaalliance.org. Stay up to date on our website at AlaskaAlliance.com.
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Page 14 Hilcorp Energy increases workload Hilcorp Energy plans to spend $900 million in 2025 on North Slope projects, up from $870 million in 2024, amid an increased drilling outlook. Page 24 ConocoPhillips eyes further discoveries ConocoPhillips is seeking out new prospects in the National Petroleum Reserve-Alaska, including one discovery that it has touted as “Willow West.” Page 30 Exhibit honors TAPS milestone at Tonsina Please join the Alaska Oil & Gas Historial Society for the upcoming exhibit “The First Pipe Laid at Tonsina,” which runs March 27-April 27. Page 38 Rising costs, declining revenue in spotlight State legislators are facing a $500 million deficit for the current and upcoming budget years and must find a way to bridge the gap by July. FEATURES The Link is published in partnership with the Alaska Support Industry Alliance by Fireweed Strategies LLC, 4849 Potter Crest Circle, Anchorage, AK 99516. We actively seek contributions from Alliance members and the oil and gas and mining industry. For advertising information and story inquiries, email Lee.Leschper@FireweedStrategies.com. Our magazine is mailed at no charge throughout Alaska to those interested in resource development and a healthy Alaska economy. To subscribe, email Admin@FireweedStrategies.com. Publisher: Lee Leschper | Editor: Tim Bradner | Production, Design: Will Leschper Contributing Photographer: Judy Patrick ON THE COVER The Trans Alaska Pipeline continues to play a vital role to the lifeblood of Alaska’s oil industry. The 800-mile pipeline is celebrating 50 years of operation this year. Photo by Lee Leschper ON THIS PAGE The Dalton Highway remains a critical link to the state’s natural resource industries. Read more about Alaska’s transportation funding outlook on Page 34. THE LINK: MARCH 2025 6
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Alliance Members and Friends: It is springtime in Alaska and that means we can count on two things: The Meet Alaska conference and an oil tax proposal from the Alaska Legislature. At the time of this writing, two pieces of legislation targeting the oil industry have been introduced. Senate Bill 92, “An Act establishing an income tax on certain entities producing or transporting oil or w in the state; and providing for an effective date” and SB 112, “An Act relating to credits against the oil and gas production tax; and providing for an effective date.” SB 92 is a tax targeted at one company, Hilcorp, and ignores the significant role the company has played in the Cook Inlet and on the North Slope, and will continue to play if the state provides a stable business climate. A quick recap of what Hilcorp has done since it first arrived in 2012: n Hilcorp came to Alaska when the Railbelt was facing a natural gas shortage and preparing for the possibility of brownouts. It immediately invested to stabilize natural gas supply for the Railbelt. At that time, the Alliance had 30 members in Kenai … within two years, we had 80! n In 2020, Hilcorp stepped in to acquire BP’s North Slope assets. As a privately owned company, Hilcorp committed to being a new partner and operator on the North Slope — bringing years of experience in maximizing production from late-life fields that many others had given up on. n As a direct result of their investments, Hilcorp arrested production decline on the North Slope and significantly increased production. Hilcorp recently celebrated 10 years of ownership at Milne Point, where it tripled production from 17,000 barrels per day in 2014 to more than 50,000 barrels per day in 2025. Hilcorp continues to invest hundreds of millions on the North Slope and Cook Inlet. In 2025, Hilcorp plans its largest-ever budget for Alaska. SB 112 is a tax targeted at North Slope producers, decreasing the per barrel credit from $8 to $5. As always, discussing taxes and the impact on Alaska is fair, but it is important to be sure we are dealing with accurate information. You will hear legislators claim this will produce about $400 million annually, but the revenue sources book puts that figure closer to $190 million. You also will hear legislators referencing a 2023 presentation from the consulting firm GaffneyCline that such an increase in taxes would “likely not lead to material reduction of existing production,” claiming this is evidence it will not impact future investment. I think we all understand the difference between impacts on existing activities and the future investment needed to grow production, and future tax revenue to the state. Our North Slope producers have repeatedly told the Legislature the tax changes would make the state a less attractive place to invest. With the new administration in Washington, including majorities in the House and Senate, we have an opportunity to increase our resource development activities in Alaska and grow our tax base. Let us work together to make sure the Alaska Legislature is focused on the same goal — growing the private sector rather than increasing their tax rates. Respectfully, Rebecca Let’s work together to keep Alaska’s oil industry thriving Message From CEO Rebecca Logan THE LINK: MARCH 2025 8
Work Smarter, Not Harder. Our Commercial Purchase Card program has an intuitive expense management tool making it easy for employees to submit expense reports, photos of receipts and notes for each transaction right from their phone. Call us today at (907) 562-0062 to speak to a member of our Treasury Management team about simplifying your credit card reconciliation. ACHIEVE MORE OUR BUSINESS IS TO HELP YOUR BUSINESS www.AlaskaAlliance.com 9 Fireweed Strategies LLC has expanded our team for our Alaska magazines and publications for 2025. Will Leschper is now leading all content, design and production for The Link as well as other Fireweed publications including those of the Alaska Miners Association and the Resource Development Council for Alaska. He has been designer and production manager of The Alliance’s publications since 2020. Will is a nationally recognized writer and photographer, and a frequent contributor to national magazines with more than 20 years in publishing. Direct news, photos and story requests to Will (leschperw@gmail.com). Mary (Leschper) Schaper is now supporting business and advertising for all Fireweed publications for 2025. Mary has over a decade of experience in energy policy communications in Washington, D.C., with roles on U.S. Sen. Lisa Murkowski’s staff, on the U.S. Senate Energy and Natural Resources Committee, and at the American Petroleum Institute. Mary is the primary contact for advertising and financial questions (mary@lunastrategiesdc.com). Lee Leschper remains the CEO of Fireweed Strategies, an Anchorage-based LLC founded in 2015 to share the full story of Alaska’s resource development industries. As some of you may have heard, Lee was involved in an accident last fall, but he remains committed to Fireweed’s mission while continuing his recovery. Fireweed Strategies publishes unique magazines that connect key industries with diverse audiences while highlighting resource development’s impact on the state’s economy and national security. Note from Publisher Fireweed Strategies
THE LINK: MARCH 2025 10
For more than 40 years, we have gathered each spring to learn, share, network and celebrate our resource development industries. Thank you for joining us this year to celebrate as we look ahead at the coming year’s opportunities and look back at the amazing history we’ve shared, advocating for our energy future, and building a stronger Alaska and America. The Alliance is composed of more than 500 members providing more than 35,000 Alaskan jobs related to the oil, gas and mining industries. Our mission is to lead and advocate for the responsible exploration, development, and production of Alaska’s oil, gas, energy, and mineral resources, ensuring durable benefits for all Alaskans and fostering economic growth. www.AlaskaAlliance.com 11
n Alaska Laborers n Alaska Airlines n Alaska Business n Lynden Inc. n 49th Freight n Denali Industrial Supply,Inc n All Pro Alaska n Northern Industrial Training n Pape’ Kenworth n UMV, LLC n Beacon Occupational Health & Safety Services n North Star Equipment Services n Sourdough Express, Inc. n Sheet Metal Inc. n Fairweather, LLC n ASRC Energy Services n US Ecology Alaska LLC And trade show vendors! THE LINK: MARCH 2025 12 A big thank you to our Pipeline Sponsor!
Hats off to our annual Industry Partners! www.AlaskaAlliance.com 13 For more information about member benefits and supporting The Alliance, visit www.alaskaalliance.com/membership
Increases coming at Prudhoe field amid new drilling The Willow and Pikka projects by ConocoPhillips and Santos, Ltd. are being closely watched this year but Hilcorp Energy has a busy winter season planned at North Slope fields it operates east of Pikka and Willow. The company briefed state legislators in Juneau on Feb. 10. Hilcorp plans to spend $900 million in 2025 on slope projects, up from $870 million in 2024, Jill Fisk, a senior Hilcorp manager, told legislators. From east to west, Hilcorp is operator at the Point Thomson gas/condensate projects and the Endicott and Northstar offshore fields. Onshore, the company operates the large Prudhoe Bay field along with Milne Point. Hilcorp is operating five drill rigs this year on the Slope, Fisk said. At Point Thomson, Hilcorp is reactivating a Doyon Drilling rig this winter with plans to move it to Point Thomson by ice road next winter to drill a second gas and condensate well. This will allow Point Thompson liquid condensate output to double to fully use capacity in the pipeline built west to Badami and Prudhoe Bay. At the large Prudhoe Bay field, Hilcorp plans to drill 58 wells this year drilled with both conventional “rotary” rigs and lightweight, truck-mounted coiled-tubing units, Fisk said. There are now 47 drill sites and production pads at Prudhoe, 1,000 miles of pipelines, 230 miles of oil field roads and about 1,000 producing wells. Hilcorp plans $900M in Slope work during 2025 CONTINUED on PAGE 16 THE LINK: MARCH 2025 14
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A major focus for Hilcorp at Prudhoe this year is new development of viscous, or thick, oil in the undeveloped parts of Prudhoe’ west end. Hilcorp has been able to increase the west-end viscous oil production from 10,000 barrels per day in 2020 to 30,000 barrels per day currently. More increases at Prudhoe are coming. Modifications to field production plants are underway to handle more of the thicker oil and construction of a new 30-inch liquids pipeline and 12-inch gas line is underway this winter to support new production. Hilcorp currently has 830 employees and 1,500 contractor employees working at Prudhoe, Fisk said. At the Milne Point field, which is adjacent to Prudhoe Bay, production reached 51,000 barrels per day in January, a record. The field has been a real success story. When Hilcorp acquired Milne Point from BP in 2014, production was 14,000 barrels per day. Hilcorp has been particularly successful with its use of a polymer flood (injection) to increase viscous oil production at Milne Point. Interestingly, BP’s Alaska managers proposed the polymer project to increase viscous oil production but were unable to get corporate approval. Hilcorp decided to go ahead with the technology after it acquired the field from BP. The company began the injection of polymers in 2018 and is now injecting 60,000 barrels a day with plans to increase it to 160,000 barrels per day. Hilcorp will also use the technology to increase production at the Nikaitchuq field that it recently acquired and the Ugnu heavy oil deposit at Milne Point. Hilcorp now has 110 employees and 400 contractor employees at Milne Point. — Tim Bradner CONTINUED from PAGE 14 THE LINK: MARCH 2025 16 Photos by Judy Patrick
Former Marathon facility to be used to import LNG Harvest Alaska, an affiliate of Hilcorp Energy, in February announced the acquisition of a mothballed LNG terminal owned by Marathon Petroleum at Nikiski, on the Kenai Peninsula south of Anchorage. The terminal and related infrastructure were formerly owned by ConocoPhillips as part of an LNG export facility that operated for years but closed in 2016. The announcement was made jointly with Chugach Electric Association, the state’s largest utility, as part of a plan to use the Marathon facility for imports of LNG to augment declining natural gas production from fields in Cook Inlet. “Under the proposal Harvest would own, develop and operate the LNG terminal and infrastructure, allowing Chugach, Marathon Petroleum Co. and other railbelt (regional) customers to secure additional natural gas supplies to help meet the market demand,” Harvest officials said. Chugach and other regional electric utilities depend on natural gas to fuel much of their power generation. Enstar Natural Gas Co., the regional gas utility, also needs gas for heating of businesses and residential homes in Southcentral Alaska. CONTINUED on PAGE 20 THE LINK: MARCH 2025 18 Harvest Alaska acquires Kenai LNG terminal Photo Courtesy Marathon
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Over half of Alaska’s population lives in the region. The utilities, including Chugach, have been seriously concerned with reduced gas supply from aging producing fields and have been exploring options to import LNG, most likely from British Columbia. “It’s positive to hear about another possible option to provide a firm gas supply to serve our members,” said Julie Estey, spokeswoman for Matanuska Electric Association. “MEA will continue to work with our utility partners to develop the best project to bridge the gap toward a more diversified energy future” MEA is working on other options to diversity its sources of fuel away from natural gas, Estey said. The project at Nikiski announced Feb. 6, “leverages MPC’s (Marathon) legacy LNG export infrastructure to alleviate a potential short-term natural gas shortage facing Southcentral Alaska. The facility includes existing dock infrastructure which was historically capable of handling LNG vessels up to 138,000 cubic meters (approximately 2.9 billion cubic feet) of natural gas,” Harvest officials said. “This infrastructure, combined with existing FERC approvals, positions the facility to meet near-term energy needs while longer-term alternatives are developed.” Marathon operates a nearby refinery at Nikiski that mainly makes jet fuel and gasoline for the Alaska market. The company uses natural gas at the refinery and acquired the LNG export plant from ConocoPhillips as an option to import LNG for the refinery’s needs. Marathon also applied for, and received, a FERC license to convert the plant from an export to import facility. Chugach Electric is part of the deal as a customer to buy LNG brought in by Harvest other regional electric utilities such as Matanuska Electric Association and Homer Electric, along with Enstar, who will be able to make purchases. The utilities, along with Hilcorp, now the region’s major gas producer, are also moving the expand gas storage capabilities using depleted gas reservoirs to bolster regional energy security. Enstar operates the Cook Inlet Natural Gas Storage Alaska facility on the Kenai Peninsula, which is being expanded, and Hilcorp and Chugach are studying the possibility of storing gas in depleted gas reservoirs in the area. Enstar has meanwhile been working on its own LNG import plan with Glenfarne, a New York-based company that develops LNG and power generation projects. This project, also at Nikiski, would require construction of new LNG import facilities such as a terminal and storage tank. This is in contrast with the Harvest-Marathon deal that would use the existing facilities at the former ConocoPhillips plant. — Tim Bradner CONTINUED from PAGE 18 THE LINK: MARCH 2025 20 Southcentral Alaska utilities have explored ways to overcome a reduced gas supply, inlcuding importation of LNG.
Alaska Department of Environmental Conservation Commissioner Emma Pokon has been selected by President Donald Trump to be the new Region 10 Administrator at the United States Environmental Protection Agency. “It has been an incredible privilege to be a member of DEC’s leadership for the last five years and to serve in Gov. Dunleavy’s cabinet,” Pokon said. “I’m grateful for the opportunity to continue public service in this new role and look forward to working with EPA leadership and Region 10 to ensure balanced implementation of the nation’s environmental laws.” ““I can’t think of any Alaskan better suited to oversee federal environmental regulations and laws for Alaska than Emma Pokon,” said Gov. Mike Dunleavy. “She has performed an admirable job leading the Department of Environmental Conservation and protecting Alaska’s pristine land and waters, and I join Alaskans from across the state in congratulating her for her new role.” Pokon was appointed commissioner by Governor Dunleavy in December 2023, her last day at the department was Feb. 5. Deputy Commissioner Christina Carpenter will serve as acting commissioner pending the governor’s selection of a new DEC commissioner. President Trump Appoints Emma Pokon as EPA Region 10 Administrator www.AlaskaAlliance.com 21 Building Alaska for over 40 years • Heavy Civil • Oil Field • Marine Transportation • Camps PALMER: 907.746.3144 | DEADHORSE: 907.670.2506 | KENAI: 907.283.1085 | ONLINE AT CRUZCONSTRUCT.COM
Site could tie in with Alaska LNG Project in future There are now two projects to import liquefied natural gas into Southcentral Alaska. One project announced involves Harvest Alaska, a Hilcorp affiliate, purchasing the former ConocoPhillips LNG export plant at Nikiski. Certain facilities at the plant can be reconfigured for LNG import instead of export. The other project, announced previously, is for Enstar Natural Gas and Glenfarne, a New York-based energy project developer, to build a new LNG import facility, also at Nikiski. This would be at the site where the big Alaska LNG Project proposed by the state’s Alaska Gasline Development Corp. (AGDC) would have its gas liquefaction plant, tanks and dock for exports. An advantage of the Harvest/Hilcorp plan is that its project can be done in time to meet the projected 2028 gas shortfalls for Chugach Electric and Matanuska Electric Association, the two largest Southcentral electric utilities. Chugach Electric CEO Arthur Miller told the Regulatory Commission of Alaska he believes the Harvest/Hilcorp purchase and conversion of parts of the Marathon plant can be done by 2028. The Enstar and Glenfarne project would take longer because a new dock, LNG storage tank and other facilities would need to be constructed. Unlike Chugach and MEA, Enstar wouldn’t need the LNG and new gas until 2032 when its current gas supply contract with Hilcorp ends. One advantage of the Enstar/ Glenfarne project is that facilities that are built could also be used if the Alaska LNG Project to export gas moves forward. If that happens, Alaska LNG would pay Enstar and Glenfarne so consumers don’t bear this cost in their natural gas prices, Frank Richards, CEO of AGDC, told a legislative committee in Juneau. While there are now two LNG import projects proposed, it seems likely one, a conversion of existing facilities, could be built faster and likely at less cost than the other, which requires new facilities. There are no capital cost estimates for either available to the public, but it seems likely only one will be built to serve all the LNG buyers, the Southcentral utilities. However, Enstar Natural Gas Co. CEO John Sims told the Regulatory Commission of Alaska his company will not join an import project owned by Hilcorp and its affiliate Harvest. Enstar is by far the largest utility customer for gas, requiring about 40 billion cubic feet of gas annually for its customers. Chugach and Matanuska Electric Association’s requirements are about half of what Enstar needs, although the Marathon Petroleum refinery at Nikiski also needs gas. Without Enstar’s participation, can the Marathon LNG plant conversion work economically? It’s likely, sources involved in the Harvest/Hilcorp project say. But Chugach’s initial purchases of LNG for its power will be relatively small because the company has its own gas supply from the onshore Beluga gas field, where it is 60% owner. Beluga will decline like other gas fields in the Inlet, but for a period, Matanuska Electric and the refinery would be the major LNG buyers. However, one other factor is the MEA may contract for new power from a proposed coal power plant planned in the western part of the Matanuka-Susitna Borough, where a coal mine also would be built. This could reduce MEA’s needs for gas from imported LNG. Meanwhile, while there are no estimates of the Marathon plant conversion. Chugach said its preliminary estimates for the cost of gas from imported LNG under the Hilcorp/Harvest plan to be in the range of $13 to $16 per thousand cubic range (mcf), which is in line with earlier forecasts by the Berkeley Research Group, which is a consultant to Enstar. That compares with the $8 to $10 per mcf now paid for gas produced in Cook Inlet. — Tim Bradner Enstar Natural Gas plans for its own LNG facility THE LINK: MARCH 2025 22 Alaska has been dependent on local gas supplies in Cook Inlet for most of its energy since the 1960s.
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New NPR-A order would reverse previous policies ConocoPhillips is beginning to look west in the National Petroleum Reserve-Alaska from its Willow project in the northeast NPR-A. There are new prospects out there, the company said. “We’re putting ourselves in a position to continue exploring west of Willow,” the company’s Senior Vice President, Kirk Johnson, told investment analysts at ConocoPhillips’ fourth quarter earnings call in February. President Donald Trump’s executive orders on oil and gas, and Alaska and the National Petroleum Reserve in Alaska (NPR-A) in particular, have been encouraging, Johnson said. ConocoPhillips already has one discovery in its federal leases in the petroleum reserve that it calls, with optimism, “Willow West.” There also are discoveries by other companies farther west. Trump’s NPR-A order is expected to reverse the restrictive NPR-A land regulations put in place in 2024 by former Interior Secretary Deb Haaland under the Biden Administration. A provision in the rules allowing protected areas in the petroleum reserve to be reviewed every five years and possibly enlarged, and with new ones created, has been a major concern for the industry. Haaland had proposed new and enlarged areas just before leaving office. Those will not happen now. However, turning back the land regulations has procedural complexities that will take time and perhaps a new Supplemental Environmental Impact Statement. ConocoPhillips looks to ‘Willow West’ in Reserve THE LINK: MARCH 2025 24
Photos Courtesy ConocoPhillips Alaska ConocoPhillips has multiple projects underway, including a new deposit in Kuparuk, Coyote, which the company plans will be brought into production in 2025. That could take two years and likely will be longer since litigation is a certainty. The NPR-A has seen other discoveries besides Willow in recent years, but restrictive land policies going back several years, and several presidents, have impeded further drilling to confirm reserves. One is a find by FEX, a subsidiary of Talisman Energy, which made a series of discoveries west of Willow near the northern coast of the petroleum reserve. Confirmation wells were drilled but the all-important flow tests, which determine how much oil can actually be produced, could never be done because of U.S. Bureau of Land Management rules. Another encouraging discovery in state of Alaska-owned submerged lands in shallow Beaufort Sea waters off the NPR-A coast also was made by a small, Texas-based independent, but raising money for further exploration was impeded by the difficulties in securing onshore pipeline routes that would allow any oil produced to be moved across the reserve onto state lands and transported further to the Trans Alaska Pipeline System at Prudhoe Bay. Meanwhile, ConocoPhillips’ Johnson was bullish on progress in Willow construction during the earnings call. “The mobilization for the winter construction season, our largest, has gone exceptionally well,” Johnson said. “Ice roads were built as well as bridges. Operations modules moved to the North Slope by sea last summer were being moved overland in December and January. The company is expecting to spend $500 million more in this winter season than it did last winter,” he said. Project employment is much higher than last year, too, at about 2,400, about twice that of 2024. Meanwhile, ConocoPhillips also will continue work on its new Nuna project in the Kuparuk River field, which came on line in December. Nuna is the first new operations pad in the Kuparuk field in more than a decade. Eight more production well are planned at Nuna on top of 10 drilled previously, there, ConocoPhillips’ Alaska President Erec Isaacson said. A new deposit in Kuparuk, Coyote, also will be brought into production in 2025. In addition, a new pad with four wells has been added at West Sak, the viscous oil project in Kuparuk that has been producing for several years. Australia-based Santos, Ltd. is also busy with its Pikka project being developed with its partner Repsol, a major company based in Madrid. Pikka’s phase one is requiring a $3.2 billion investment. As of early spring, 15 of 45 production wells for Pikka have been drilled. The major goal for this winter is to complete the installation of 120 miles of pipeline, which will allow the startup of production of phase one in spring 2026 at 80,000 barrels per day at peak. About 2,200 contract workers are employed at Pikka this winter. — Tim Bradner www.AlaskaAlliance.com 25
THE LINK: MARCH 2025 26 ConocoPhillips Alaska reported net income of $1.3 billion in 2024 in connection with the company’s fourth-quarter 2024 earnings announcement. The company reported the following results for the full year of 2024: “ConocoPhillips Alaska incurred an estimated $1.5 billion in taxes and royalties in 2024, which includes $1.1 billion to the State of Alaska and $400 million to the federal government,” the company said in a statement. “Additionally, for the full year of 2024, ConocoPhillips Alaska invested $3.2 billion in capital,” the statement said. Alaska’s oil and gas industry is continuing to benefit from changes in state petroleum taxes made by the state Legislature in 2013. In the years prior, Alaska’s tax policy was complicated and subject to frequent changes, which made it difficult for companies to plan investments in multi-year projects like Willow and Pikka on the North Slope. As for ConocoPhillips in Alaska, “The company had an exceptional year in 2024,” said Erec Isaacson, President of the company. “We successfully achieved first oil at Nuna, remaining under budget and ahead of schedule. Additionally, we exercised our preferential rights and acquired additional working interests in the Kuparuk River and Prudhoe Bay Units in the fourth quarter.” “We have also accomplished significant milestones on the Willow project, including delivery of the Operations Center modules to Alaska, along with infrastructure developments such as gravel roads, pads, bridges, and pipelines. This project is progressing well, bolstering Alaska’s economy and creating thousands of jobs. We remain on track for first oil in 2029,” Isaacson said. “Year-to-date, we invested more than $3 billion in Alaska projects, exceeding our total 2023 capital expenditures. We had an active year in 2024, highlighting our long-term commitment in Alaska and demonstrating the value of a stable fiscal regime.” Since 2007, ConocoPhillips Alaska has incurred approximately $46 billion in taxes and royalties to the State of Alaska and the federal government. Of that amount, about $36 billion went directly to the state. In that same period, ConocoPhillips Alaska’s earnings were approximately $28 billion. — Tim Bradner ConocoPhillips reports net income of $1.3B in ‘24 Photo Courtesy ConocoPhillips Alaska
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Trilogy completes feasibility study for Bornite copper There’s new action on minerals development in Northwest Alaska. Trilogy Metals Inc., a Vancouver, B.C.-based “junior” mining exploration firm, has completed a Preliminary Economic Assessment Study, or PEA, for the large Bornite copper deposit in Northwest Alaska. Meanwhile, it appears new President Donald Trump is ready to greenlight the proposed Ambler Access Project, a 211-mile industrial road from the state’s Dalton Highway to the Ambler Mining District, where Ambler Metals is exploring copper discovered at Arctic and Bornite. The road would allow mineral concentrates to be trucked to the Dalton Highway and to markets. Bornite is owned by Ambler Metals LLC, which is held 50-50 by Trilogy and Australia-based South 32, a major mining company. Ambler Metals is exploring discoveries in Northwest Alaska including the high-grade Arctic copper deposit. Bornite was discovered earlier, about 70 years ago, and explored over several years by Kennecott Minerals. Kennecott turned its attention to a new discovery at Arctic, which has taken priority. Ambler Metals has recently resumed work at Bornite and Trilogy undertook the first PEA for a mine. The study is preliminary in nature, Trilogy said. Highlights of the study: n Resources of 1.9 billion pounds of copper were identified, which were deemed sufficient for mining over 17 years. The PEA describes technical and economic feasibility of a 6,000 tonneAmbler Access Project gains steam with Trump THE LINK: MARCH 2025 28 Photo Courtesy Ambler Metals Ambler Metals is exploring copper discovered at Arctic and Bornite (above).
per-day mine. “Tonne” is a U.K. and Canada weight unit of 2,200 pounds. n Initial capital required would be $503.8 million with additional capital of $363 million during the life of the project. Operating costs are estimated at $98.91 per tonne milled. All-in cost per pound of copper is estimated at $3.35. The study assumes a 4.20 per pound price for copper. n Post-tax Internal Rate of Return is estimated at 20%. The assessment assumes that the Bornite deposit would be developed after the Arctic deposit. Together the two would underpin mining in the area for 30 years, the PEA says. On Trump’s Ambler Road decision, assuming it happens, the effect would be to reverse former Interior Secretary Deb Haaland’s decision to terminate permits for the road. In April 2024, the U.S. Bureau of Land Management filed the Final Supplemental Environmental Impact Statement which recommended “No Action” as the BLM’s preferred alternative. The Ambler Access Project is being led by the Alaska Industrial Development and Export Authority. AIDEA strongly objected to the process used by the BLM to reach a “no build” decision and the effect of the decision to block access to state lands, minerals and federally patented mining claims in the Ambler Mining District. In June 2024, the BLM issued the Record of Decision confirming the selection of the no action alternative and thus denied AIDEA’s application for a right-of-way grant across BLM-managed lands which had been issued to AIDEA on Jan. 5, 2021. In January, President Trump signed the executive order “Unleashing Alaska’s Extraordinary Resource Potential” which included a direction to federal agencies to “place a temporary moratorium on all activities” to the record of decision issued in 2024 “in order to review such record of decision in light of alleged legal deficiencies and for consideration of relevant public interests and, environmental impacts … and, as appropriate, conduct a new, comprehensive analysis of such deficiencies, interests and environmental impacts.” President Trump also ordered the BLM to, “reinstate the record of decision signed on July 23, 2020, by the BLM and U.S. Army Corps of Engineers. The July 2020 record of decision approved the development of the northern, or “Alternative A” route of the 211-mile access road. AIDEA and Ambler Metals believe Haaland’s decision to void the road permits was illegal and a violation of the Alaska National Interest Lands and Conservation Act of 1980 (ANILCA) which explicitly grants a road corridor right-of-way across federal lands west from the Dalton Highway to the Ambler Mining District. — Tim Bradner www.AlaskaAlliance.com 29 Photo Courtesy Trilogy Metals
Please join the Alaska Oil & Gas Historial Society for the upcoming exhibit “The First Pipe Laid at Tonsina” at the Petroleum Club of Anchorage. This exhibit commemorates the 50th anniversary of the commencement of the Trans-Alaska Pipeline System, which began with the first pipe laid under the Tonsina River on March 27, 1975. n Exhibit Dates: Runs from March 27-April 27, 2025 n Opening Reception: March 27; 5:30-7:30 p.m. n Location: Petroleum Club of Anchorage, 3301 C Street, Suite 120 This free exhibit offers a unique opportunity to explore the history and impact of the Trans-Alaska Pipeline on Alaska’s oil and gas industry. We look forward to celebrating this significant milestone with you! On Nov. 16, 1973, through Presidential approval of pipeline legislation, Alyeska Pipeline Service Company received permission to begin construction of the 800-mile Trans Alaska Pipeline, its pump stations and the Marine Terminal at Valdez. The 360-mile road from the Yukon River to Prudhoe Bay was built, and construction of the Valdez Terminal began in 1974. At the same time, work started on pump stations and the pipeline work pad, undertaken by Alyeska, then composed of Atlantic Pipeline Company, BP Pipeline Corporation, Humble Pipe Line Company, Amerada Hess Corporation, Home Pipeline Company, Mobil Pipeline Company, Phillips Petroleum Company and Union Oil Company of California. The lengths of pipe were placed under the Tonsina River between Valdez and Copper Center in March 1975 and more than 28,000 Alyeska workers and contractors worked on the pipeline at the peak of activity that year. Two years later, all pipe had been installed. The first oil entered the line at Prudhoe Bay on June 20, 1977, and reached Valdez on July 28. On Aug. 1, 1977, the first tanker load of North Slope oil left the Port of Valdez aboard the ARCO Juneau. At 800 miles long, TAPS is one of the world’s largest pipeline systems, transporting North Slope crude oil from Pump Station 1 in Prudhoe Bay; then travels across the state’s rugged and beautiful terrain, including traversing three mountain ranges, three major earthquake faults, and hundreds of rivers and streams; and comes to its end in Valdez, the northernmost ice-free port in North America. Tankers are loaded at the Valdez Marine Terminal, delivering about 4% of the nation’s crude oil supply to market, according to Alyeska. Since startup in 1977, TAPS has transported more than 18 billion barrels of Alaska North Slope crude from the North Slope to Valdez. Please join us to celebrate a historic TAPS milestone THE LINK: MARCH 2025 30
www.AlaskaAlliance.com 31 — JUNEAU, ALASKA — AVAILABLE STATEWIDE operations@coastalhelicopters.com 907-789-5600 www.coastalhelicopters.com ✓ CONSTRUCTION ✓ EXPLORATION ✓ CONTRACT ✓ SUPPORT ✓ CHARTER Past editions of The Link Magazine can be found online at www.AlaskaAlliance.com
Gold output rises to $2.3B amid new production At a value of roughly $2.3 billion, gold dethroned zinc as the most valuable metal produced in Alaska during 2024. While zinc had a strong year both in terms of tons produced and total production value, the galvanizing metal was surpassed by gold due to rising prices and production of the precious metal. Thanks in large part to a surge in gold production value, the U.S. Geological Survey (USGS) calculates that the total value of non-fuel minerals produced in Alaska last year — gold, zinc, silver, lead, and sand and gravel products — at $4.7 billion. When you add in the coal produced for in-state power plants, the total value of all the materials extracted at Alaska mining operations during 2024 comes in at around $4.8 billion. This is a roughly 13% increase over the $4.25 billion of mined commodities produced in the 49th State during 2023. However, due to likely drops in production from the Red Dog zinc mine beginning this year, Alaska’s mine production value has likely reached its apex until a new source of ore for the world-class operation in Northwest Alaska becomes available or the next generation of mines comes online. During his State of the State address, Alaska Gov. Mike Dunleavy pointed to one such project that could contribute to Alaska’s mine production value by the end of the decade. “The Graphite One deposit, the largest in North America, north of Nome, continues to move ahead with support from a Defense Department grant,” he said. “Construction could begin in that project by 2027 and the mine could be producing as early as 2029.” In addition to being on Gov. Dunleavy’s radar, the Graphite Creek project being advanced by Graphite One Inc. fits within the domestic critical mineral priorities outlined in the “Unleashing American Energy” and “Unleashing Alaska’s Extraordinary Resource Potential” executive orders signed by President Donald Trump on his first day back in the Oval Office. The Alaska-centric executive order follows up on a commitment made by the President two days after being elected. “During my second term, we will continue the fight for Alaska like never before,” he said during the Nov. 8 address to Alaskans. “We will maximize Alaska’s mining potential.” That potential includes more than 100 mineral projects in various stages of exploration, evaluation, and permitting, according to Dave (Zoom) Szumigala, a mineral resources geologist at the Alaska Division of Geological & Geophysical Surveys (DGGS). Zoom told attendees of the AME Roundup mining convention held in Vancouver, British Columbia, in January, that more than $200 million was invested into exploration and other activities needed to advance these projects closer to production during 2024. While not all the projects in the Alaska mineral production pipeline will make it across the finish line, and others are likely decades away from production, there are plenty of extraordinary mineral projects ready to be unleashed over the coming years. In the meantime, Alaska’s eight hardrock metal mines, one energy fuel mine, 150 placer gold mines, as well as numerous sand, gravel, and rock quarries contributed to a banner year in 2024. At the cusp of 1 million ounces of gold The opening of the Manh Choh Mine, increased production at Pogo, and climbing precious metals prices combined to push the value of gold produced in Alaska to about $2.3 billion in 2024, a 64% surge over the $1.4 billion of the precious metal produced in the state during 2023. Alaska’s hardrock and placer mines produced approximately 959,000 ounces of gold during 2024, which is roughly 32% higher than the 728,000 ounces produced in 2023. The rest of the boost to Alaska gold production values comes from an equally impressive surge in gold prices from an average of $1,943/oz in 2023 to an average of $2,407/oz in 2024. With gold prices continuing to climb to above $2,800/oz and $3,000/ oz level prices in the forecast for later this year, the surge in Alaska’s gold production value is expected to continue into 2025. The forecasted continued strength in gold price is expected to be augmented by further rises in ounces produced in Alaska this year. The largest addition of the ounces of gold produced in the state this year is expected to come from Manh Choh, a mine about 200 miles southeast of Fairbanks that came online in mid2024. Being operated under a joint venture between Kinross Gold Corp. (70%) and Contango ORE Inc. (30%), Manh Choh is a satellite mine that delivers high-grade ore to the Kinross Alaska mill at the Fort Knox Mine about 20 miles north of Fairbanks for processing. A total of 139,000 ounces of gold and 54,380 ounces of silver were recovered from three batches of ore processed during the second half of 2024. The gold recovered from Manh Choh ore is expected to climb to about THE LINK: MARCH 2025 32 Value of Alaska’s mines soars to nearly $5B in ‘24
200,000 ounces this year, adding to the nearly 300,000 ounces of gold expected to be recovered from ore mined at Fort Knox in 2025. At the same time, gold output from Northern Star Resources Ltd.’s Pogo Mine, about 85 miles southeast of Fairbanks, is on the rise. The Pogo mill recovered 279,427 ounces of gold last year, a 10% increase over the 254,492 recovered during 2023. The ongoing improvements in performance at Pogo are expected to continue into 2025. “The Pogo plant is forecast to operate at a targeted throughput of 1.4 million tonnes per annum,” said Northern Star Resources Managing Director Stuart Tonkin. This milling rate, with ore grades similar to last year, would put Pogo on the cusp of hitting 300,000 ounces of gold during 2025. “So, we’re pretty happy with where Pogo is at,” Tonkin said. Three hardrock mines in Southeast Alaska — Coeur Mining Inc.’s Kensington, Hecla Mining Company’s Greens Creek, and Sundance Mining Group’s Dawson — produced approximately another 162,000 ounces of gold last year. When you add in the gold recovered from around 150 placer operations across the state, Alaska mines were on the cusp of producing 1 million ounces of gold during 2024 — a milestone expected to be reached this year. Usibelli keeps Railbelt lights on For residents, businesses, and communities living along the Alaska Railbelt, the roughly 1 million tons of coal produced at Usibelli Coal Mines operations near Healy has a greater significance than the roughly 2% it contributed to Alaska’s mineral production value in 2024. Usibelli’s significance rests on a paradox that is similar to the discrepancy between Alaska’s world-class copper resources and nearly non-existent production. The paradox that makes Usibelli so valued to Alaska Railbelt energy customers is Alaska has both world-class reserves and a shortage of natural gas. The natural gas shortage has become so dire that Alaska Railbelt utilities are having a tough time delivering electricity and natural gas to their customers. To help boost the energy supply and help ensure it does not need to initiate a rolling blackout, GVEA is leaning on increased output from its coal-fired power plants at the mouth of Usibelli Coal Mines operations in Healy. Usibelli delivers roughly 1 million tons of coal per year to GVEA’s two Healy power plants at the mouth of its mining operations, capable of generating a combined 57 megawatts of electricity, plus three other Interior Alaska power plants capable of generating another 70 MW of electricity. Unleashing Alaska’s mineral potential Unleashing Alaska’s mineral and other resource potential is so high on the Trump administration’s priority list that the President signed an executive order addressing this on his first day back in office. “President Trump singled out Alaska out of all the 50 states for its own series of Executive Orders,” Gov. Dunleavy said during his State of the State address. “This is unprecedented — and demonstrates his view of the importance of Alaska as a solution to America’s energy, manufacturing, and national security issues.” On the minerals side of that solution, DGGS has identified 110 projects on the Alaska mine development pyramid — 55 early-stage mineral exploration projects, 37 mid- to advanced-stage exploration projects, six mineral projects in the economic evaluation stage, four in permitting, and eight in production pinnacle of the pyramid. According to preliminary data compiled by DGGS, roughly $205 million was invested last year into pushing mineral exploration projects toward the top of this pyramid. This figure, which is slightly lower than the approximately $230 million invested in 2023, will rise somewhat when lateyear exploration figures are included. — Shane Lasley, North of 60 Mining News www.AlaskaAlliance.com 33
Transportation commissioner discusses process Construction is booming on the North Slope but highway contractors are complaining of lean times this spring with a slump in new contracts going to bid from the Department of Transportation and Public Facilities. State transportation Commissioner Ryan Anderson said things should get better quickly. About $200 million in new projects will be out for bid between March and May, the commissioner said. DOTPF will also focus on getting small contracts out that will allow contractors to retain skilled workers until work on major summer projects ramp up. Anderson briefed state legislative committees in late February on efforts to get more work on the street and also met with the Associated General Contractors of Alaska, the construction industry’s trade association. Although hundreds of millions of dollars of transportation projects are in the advanced planning stages, DOTPF has hit roadblocks in getting work on the street. Contract awards dropped from $736.7 million in Federal Fiscal Year (FFY) 2023 to $630.6 million in FFY 2024, which cut work for contractors. FFY 2025 is now expected to be better, with a total of $935 million, DOTPF told legislators. There have particularly been delays in getting utility relocations done to allow road work to proceed. Anderson told legislators that utilities have been hampered in relocations by supply chain issues and federal regulations including Buy America and Build America. Unless utilities can source materials that are certified under federal rules, they aren’t willing to risk doing work. Until that happens, the state can’t get the final sign-off for a project from the Federal Highway Administration, which pays the bills. Another problem is the cost increase of many projects after estimates are done by state engineers and bids come in from contractors. If costs exceed funds available, the project must be reconfigured or delayed. This has particularly become a problem in rural airport projects where there are complicated logistics. This is a national problem. The National Highway Construction Cost Index, a metric used nationwide, has gone up 61% from mid-2020 to mid2024. Legislators asked Anderson whether federal workforce cuts are hampering approvals of funds for Alaska construction. The commissioner said this is being watched closely but so far there are no delays. In some cases, projects funded from federal programs with certain key words like “carbon reducState looks to ramp up road project funding THE LINK: MARCH 2025 34
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