NEWS BULLETIN

January 09, 2003 --- Vol. 9, No. 2January 2003

KKPL gets temporary certificate; construction starts tomorrow

The Regulatory Commission of Alaska said today that it has granted an emergency motion filed by Kenai Kachemak Pipeline LLC for a temporary certificate of public convenience and necessity for construction of its 12-inch gas pipeline. Construction will begin tomorrow.

The commission had conditionally granted a certificate, subject to KKPL filing unconditional guarantees from a financially acceptable entity for GUT LLC and from Marathon Oil Co.

KKPL filed the unconditional guarantees Jan. 3, stating that the guarantees were submitted to the state of Alaska through the commissioner of the Department of Natural Resources. The guarantees were filed with the state pipeline coordinator in connection with the application of KKPL for a state right of way lease for the pipeline.

KKPL filed an emergency motion Jan. 7, stating that its contractor was prepared to begin construction Jan. 10, but would not be able to begin until KKPL had a certificate or temporary certificate in hand. KKPL also said it would not be able to meet its in-service date unless construction began soon after Jan. 1.

The commission said it was concerned about the guarantees filed Jan. 3, because those are to DNR, not to the RCA, "and are for performance of the terms of the lease and are not evidence of the financial fitness of KKPL." The commission said it "may not be able to rely on them to assure completion of the pipeline" and plans to release an order addressing those issues.

But the commission said it may issue a temporary certificate pending the determination of an application for a certificate and these circumstances qualify for a temporary certificate because timely construction of the pipeline will facilitate provision of service to customers currently without service.

Aurora closes on Anadarko leases, begins Lone Creek pipeline project

Aurora Gas LLC said today that it has closed on its previously announced acquisition of Anadarko Petroleum Corp.'s entire Cook Inlet lease holdings. The Anadarko Cook Inlet lease holdings include approximately 20,000 net acres on the west side of Cook Inlet and approximately 33,000 net acres on the Kenai Peninsula.

Aurora said that this acreage, combined with its recently acquired acreage from ConocoPhillips and previous leasehold, brings the company's total to approximately 100,000 acres leased in the Cook Inlet area of Alaska.

Aurora also said it has begun installation of the Lone Creek gas gathering system and anticipates that the project will be completed in the first quarter of the year. The six-inch, six-mile line will connect the Lone Creek No. 1 well to the Marathon-owned and operated Beluga pipeline.

Aurora said it will be delivering natural gas from the Lone Creek well to the Alaska Pipeline Co. for Enstar Natural Gas Co. system requirements.


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