June 7, 2021

Active development started in 1977 on the North Slope followed by the South Slope in 1981. Currently development is very limited. Associated gas in Alaska is mostly injected because of lack of gas pipeline.

The Trans-Alaska Pipeline has a capacity of 2 MMBbl/d, with declining utilization, cold weather operations become challenging to maintain reliable throughput. Incorrys forecast assumes that the pipeline will continue to be operational during the forecast period, overcoming flow challenges with improvements and toll increases.

The production forecast does not include upside potential from Alaska LNG. Alaska LNG has proposed to bring 3.5 Bcf/d of associated gas from North Shore to Nikiski (South Shore). If pipeline, gas processing facilities and LNG facilities are built, it may boost oil drilling. Existing production is declining and will reach 250 MBbl/d in 2040 unless Alaska LNG has become operational.

In May 2020, the U.S. approved the $43B Alaska LNG project; which still seeks investors. Alaska LNG has a number of advantages: lower gas production cost, proximity to Asian market, and LNG liquefication cost advantaged by cooler ambient temperatures.

Alaska Oil Initial Productivity

Alaska Oil Number of Wells