Keeping Alaska Fueled

Alaska Business Monthly, August, 2001 by Roger Kane

While gas and oil operators and producers play a key role in keeping the state's economy healthy, there are many companies whose partnerships and efforts to distribute gas and oil in Alaska keep the state vibrant.

ENSTAR, for example, provides its residential and commercial customers in Anchorage and on the Kenai Peninsula with natural gas. Williams Alaska's and Tesoro's retail gasoline outlets, fuel terminals and refineries power autos, marine vessels and aircraft in Alaska.

These companies' contributions to the economy in Alaska are significant. As new oil and gas opportunities develop, these companies will become even more prominent and more important to the safe, efficient delivery of fuel to keep the state running strong.

Anadarko Petroleum Corp.

Anadarko is the largest independent oil and gas, exploration and production company in the world.

Anadarko's main office is in Houston, but the company is active in 14 other countries. The company is among the largest natural gas producers and reserve holders in North America and currently has the single-most active drilling operation in North America, with more than 80 rigs at work.

Anadarko traditionally has grown by expanding drilling, but in July 2000, it nearly doubled its reserves when it merged with Union Pacific Resources Group Inc. As Anadarko has grown, it has picked up momentum and is creating the opportunity to accelerate growth. The company chalked up a 150 percent increase in employment with the acquisition of UPR and has an aggressive exploration program under way in Alaska, Texas and the Gulf of Mexico.

Anadarko also has a 22 percent working interest in the 80,000 barrel-a-day Northern Alaska Alpine Oil Field. Phillips Alaska retains the rest of the ownership in the field and acts as the operator.

While Anadarko has only five people working in Alaska, the company is poised for growth, according to Mark Hanley, the company's public affairs manager in Alaska.

Hanley said one of Anadarko's goals is to become an operator in the state of Alaska. Anadarko has a very detailed strategy in place to accomplish that goal and is exploring for Alaska's untapped resources with expansion in mind.

Anadarko's worldwide production of 112 million barrels of oil in 2000 was an increase of 124 percent over the 50 million barrels of oil the company produced in 1999.

Revenue for 2000 eclipsed $5.6 billion, up from $1.7 billion in 1999.

ENSTAR Natural Gas Co. and Alaska Pipeline Co.

ENSTAR is the sole gas distributor to Anchorage, serving about 90 percent of the city's population. Its 2,245 miles of gas mains serve approximately 105,500 customers. ENSTAR's natural gas rates for residential and commercial customers are among the lowest in the U. S. It also has the highest gas usage, according to the SEMCO Energy Web site. SEMCO Energy Inc. provides natural gas distribution and diversified businesses across the nation.

In 2000, ENSTARs customer base was 87 percent residential, 2 percent power industrial and commercial transport, and 11 percent small commercial. Its annual growth rate averages approximately 3 percent.

The Alaska Pipeline Co. is the only natural gas utility transmission system in the area. ENSTAR is APC's primary customer. APC has 394 miles of intrastate pipeline.

ENSTAR's mission is to safely provide low cost energy to businesses and residents of Alaska.

The company's goals are to extend or acquire long-term supplies of natural gas for its customers, provide quality service, pursue new business opportunities by extending natural gas main lines to new areas within its service area and extend service to provide natural gas service to Homer and points along the route.

ENSTAR currently has 156 regular employees and 42 temporary employees, hired for the summer construction season.

The ENSTAR 2001 operating budget, including the amount paid to the Cook Inlet natural gas producers is $97.5 million. The 2001 capital budget is $11.1 million. Revenues in 2000 were $91.7 million.

ENSTAR and Alaska Pipeline Co. joined SEMCO Energy Nov. 8,1999. Both companies were started in 1961 and are headquartered in Anchorage with offices in Soldotna and Wasilla.

SEMCO distributes natural gas to 250,000 customers in 24 counties throughout Michigan, while ENSTAR Natural Gas Co. distributes natural gas to approximately 106,000 customers in Southcentral Alaska.

The Company has three subsidiaries: NATCOMM Engineering and Construction provides pipeline construction, engineering and quality-assurance services throughout much of the country. SEMCO Energy Ventures operates businesses involved in propane distribution, interstate pipelines and natural gas storage in various regions of the U.S. ARETECH Information Services is a information technology company focused on providing outsourcing services for the mid-range computer sector.

Tesoro Petroleum Corp.

With a combined crude capacity of 275,000 barrels a day, Tesoro's three refineries make it one of the largest independent refining and marketing companies in the Western U.S.