Covering an area of 83,300 acres (equivalent to about 337 km2), the Kitchen Lights Unit production region of Deutsche Oel & Gas is the largest in the Cook Inlet of Southcentral Alaska.
Huge potential in the Cook Inlet
There are currently a number of different companies producing crude oil and natural gas in the Cook Inlet using a total of 16 offshore production platforms. The oldest production platform was installed by Shell and dates back to 1964. Thanks to the considerable amount of development activity in the 1960s and 1970s there are several oil and gas pipelines running through and around the Cook Inlet.
The northern and eastern banks of the Cook Inlet, the areas around Anchorage, Kenai/Nikiski and the Matanuska-Susitna Valley, have very extensive natural gas supply pipelines, which serve the power and heating requirements of Southcentral Alaska. In addition, pipelines lead to a plant that converts natural gas into liquefied natural gas (LNG) for export, and to a refinery that processes crude oil.
Substantial subsidies from the State of Alaska
In order to avoid the long-term prospect of an energy shortage in the Railbelt region of Alaska, despite an abundance of natural gas, Alaska legislators made the decision in April 2006 to subsidise investments in oil and gas exploration and the installation of the infrastructure necessary in the Cook Inlet to support this region. In Senate Bill 309 and House Bill 280, the Senate and House of Representatives resolved to grant production tax credits to reimburse a portion of the investment costs.
To date, the State of Alaska has contributed over EUR 300 million to the investments of Deutsche Oel & Gas in the Cook Inlet through these programmes. The subsidies were granted for the last time on investments made until 30 June 2017.