The Arctic Slope Regional Corporation’s Nikiski fabrication facility, located just north of the ConocoPhillips LNG facility on the Kenai Spur Highway, will shut down within 60 days. It is operated by ASRC’s subsidiary ASRC Energy Services.

Employees were informed of the closure Nov. 8, said ASRC Senior Director of Communications Ty Hardt. According to a statement by ASRC released Friday, about 40 workers might lose jobs when the Nikiski facility closes by next month. Some of them could be transferred, along with some of the Nikiski facility’s equipment, to a larger ASRC fabrication plant in Anchorage, and others to ASRC’s North Slope operations.

ASRC Energy Services is a member of the oil field support trade association Alaska Support Industry Alliance. Alliance General Manager Rebecca Logan said that while “there’s no official role the Alliance would play in helping people find work in other areas,” ASRC would likely have other job opportunities to offer to workers who plan to stay with the company. For example, Logan pointed out that ASRC purchased two Beaufort Sea leases from Shell Oil Company, which was announced Wednesday.

“They (ASRC) are very actively involved in other areas of the state, so it would surprise me if a significant number of people didn’t have an opportunity for employment somewhere else with ASRC,” Logan said.

According to an ASRC information sheet, the Nikiski Fabrication Plant produces structural steel and pipe and installed electronics and instruments. Hardt said the plant had serviced Cook Inlet platforms as well as doing general fabrication work, and that its recent major clients were Hilcorp Energy Company and Tesoro Corporation, which operates its Nikiski petroleum refinery near the facility.

ASRC, one of Alaska’s 12 Native corporations, bought the Nikiski facility in 1997 and made significant upgrades to it as recently as 2012. A 26,000-square foot fabrication shop and heated warehouse, office space, staff housing, warm storage, warehouse and lot parking occupy the space, as well as a dock for offshore oil exploration. The Alaska LNG Project’s marine exploration with a jack-up rig operated out of the dock, known as the Rig Tenders dock.

The company is consolidating the Anchorage and Nikiski fabrication facilities in an effort to “streamline its operations to be right-sized and competitive in this challenging economic environment,” according to ASRC’s announcement.

A steep decline in production and oil prices have sharply impacted ASRC’s bottom line. In April 2015, the corporation distributed more than $125 million to its approximately 10,000 shareholders in the villages on the North Slope. In 2016, its shareholder distribution declined by more than half to $60 million.

Ben Boettger can be reached at ben.boettger@peninsulaclarion.com, and Elizabeth Earl at elizabeth.earl@peninsulaclarion.com.