DOE awards ASRC subsidiary up to $49.8 million for Prudhoe Bay hydrate test site

The U.S. Energy Department has awarded ASRC Consulting and Environmental Services a contract worth up to $49.8 million to maintain its Prudhoe Bay methane hydrate test site and plan a possible second production test. The National Energy Technology Laboratory signed the contract Sept. 30, and the department announced it Oct. 14.

Methane hydrate is natural gas locked in ice-like crystals. A 2018 U.S. Geological Survey assessment estimated almost 54 trillion cubic feet of undiscovered hydrate gas on the North Slope, a figure the state cited when it approved the site's drilling agreement in 2022. The most recent production test at the site ran from Sept. 19, 2023, to July 30, 2024.

The new contract "will help move methane hydrate research from scientific discovery toward the real-world testing needed to determine its commercial production potential," Curt Coccodrilli, acting assistant secretary of the department's Hydrocarbons and Geothermal Energy Office, said in the release.

The first phase covers maintaining the site and planning. A second phase, only if the department exercises an option, would set up and run temporary facilities to produce methane from hydrate-bearing reservoir sections. The site sits on the Prudhoe Bay Operating Unit's Kuparuk 7-11-12 pad, with four wells, including two production test wells, plus surface facilities that ACES holds. Field testing runs under a state-approved drilling agreement between ACES's parent company, AES, and Hilcorp Alaska.

The lab has obligated $18.5 million so far. The department called the contract five years long, but the federal contract database lists a current end date of Dec. 31, 2027, with options running to Dec. 31, 2029.

The lab did not compete the contract. A June 15 sole-source notice cited ACES's exclusive site access, its experience from the earlier production testing, state authorization and an arrangement letting one operator drill and run the wells. The contract record lists one offer. Congress, in report language for the fiscal 2026 Energy and Water spending law, directed the department to plan a follow-on test and keep the site able to restart testing for at least six months.

The department's 2012 Ignik Sikumi test produced gas during a carbon dioxide and nitrogen injection and depressurization test. A 2018 well, Hydrate-01, confirmed two hydrate-filled reservoirs suitable for longer testing. The lab's first ACES contract, awarded in August 2021, grew from about $40.8 million to nearly $58.9 million obligated before it ended Sept. 30. Japan's energy agency had picked the operator through its own competitive process, and Japan funded the two test wells while the department funded a geodata well. Gov. Mike Dunleavy called the 2022 state approval "a major milestone."