NEWS BULLETIN

September 20, 2002 --- Vol. 8, No. 98September 2002

Foothills Pipe Lines

Foothills Pipe Lines Ltd., the lead promoter of an Alaska Highway gas pipeline for more than 20 years, may be on the verge seeing its identity shrink in Calgary. TransCanada PipeLines Ltd. and Duke Energy Corp., the joint owners of Foothills, are pondering a move that would see Foothills close its office and move its operations across downtown Calgary into the TransCanada head office.

A Duke spokeswoman told the Calgary Herald Sept. 19 that the partners are "certainly looking (at the move) very seriously." although a TransCanada spokesman said the decision-making is in a "preliminary stage."

TransCanada suggested the transfer could involve the head office functions, leaving a small group of Foothills 55 employees to work on the details of an Alaska Highway pipeline.

Among analysts, the shuffle makes sense, especially for Duke, which is under pressure to squeeze unnecessary spending out of its budget.

Foothills, which has exclusive rights to build and operate the Canadian portion of the Alaska Highway project, holds 62 percent of the Alaskan Northwest Natural Gas Transportation Co. and has a 25 percent stake in the Alaskan North Slope Project Sponsor Agreement.

It delivers more than one-third of all Canadian gas exports to the United States through the so-called "pre-build" portion of the Alaska Highway project, which opened in 1981 and delivers gas from Western Canada.

The "pre-build" was installed to help finance the far costlier northern section of a delivery system from the North Slope. It currently ships 2.2 billion cubic feet per day on the eastern leg to the Midwest and 1.1 billion cubic feet per day to California and the U.S. Pacific Northwest.

Tubing being pulled from A-22 well; commission schedules hearing

BP Exploration (Alaska) Inc. has provided the Alaska Oil and Gas Conservation Commission with a review of the Prudhoe Bay A-22 well explosion Aug. 16 which seriously injured a BP worker.

BP said immediate causes of the incident were pressure on the outer annulus of the well which caused a failure in that casing; communication between the inner annulus and outer annulus; and surface casing failure at a shallow depth which resulted in a high-pressure gas and fluid release.

The commission has scheduled a hearing for Nov. 14 on all of its orders on the Prudhoe Bay field, "to consider prescribing a rule to govern the operation of development wells within the Prudhoe Bay field with pressure communication or leakage in any casing, tubing or packer."

An investigation team established after the A-22 explosion recommended that wells that could not be maintained at or below 1,000 psi should be shut-in; 137 wells were shut-in Aug. 29.

BP Exploration (Alaska) spokesman Paul said told PNA Sept. 20 that as of Sept. 19, 26 of the 137 wells were on-line and producing; 21 additional wells were ready for production as soon as routine maintenance was completed at Gathering Center 2. The 90 wells not ready to come back into production accounted for 27,000 barrels per day of production.


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