September 11, 2006 --- Vol. 12, No. 60September 2006

Teck Cominco applies for unit at Red Dog

Teck Cominco Alaska Inc. has applied to form a 19,200-acre unit in Northwest Alaska adjacent to its Red Dog lead-zinc mine.

The Alaska Department of Natural Resources Division of Oil and Gas said Sept. 10 that Teck Cominco would be the operator sole working interest owner for the proposed Sakkan unit. The division said the proposed unit covers approximately 19,200 acres in four shallow gas leases in sections 2-5, 8-11, 14-17, 20-23, 26-29 and 34-36 of township 32 north, range 19 west, Kateel Meridian, and sections 1-3, 11-4 of T31N, R19W, KM.

Teck Cominco has been exploring for gas in the area since the late 1990s, with the goal of using the local resource to replace diesel fuel at the mine.

The four shallow natural gas leases were extended by three years in October 2003. Mark Myers, then director of the Division of Oil and Gas, said the extension decision was “based upon the exploration activity already conducted on the leased and adjacent areas, and the likely prospect of further exploration activities and possible development and production.”

Prospects identified by past mineral prospecting range from a mile from the mine and mill complex to within 10 miles of the mine. Teck Cominco has said in the past it would like to use natural gas to replace 18 million gallons of diesel used at the mill each year.

The natural gas resource at Red Dog is shale gas in the Kuna formation. An estimated 60 billion cubic feet over 20 years would be required to replace the diesel, and the estimate in 2002 was that 40 to 60 wells would be required.

The company completed two wells, NB 01 and NB 02, in sections 17 and 18 of T13N-R18W, KM, in 2005. Teck Cominco permitted three exploratory wells this summer, NB 03, NB 04 and NB 05, two in section 17 and one in section 18 of T13N-R18W, KM. All five of these wells are vertical holes.

CORRECTION: NPR-A northeast sale halted temporarily

Petroleum News incorrectly reported Sept. 7 that the Sept. 27 National Petroleum Reserve-Alaska lease sale has been halted.

It has been temporarily halted, the Bureau of Land Management said Sept. 8.

The injunction by U.S. District Court Judge James Singleton Jr. halts the lease sale until the judge makes a final decision later in the month.

BLM will make a decision this week on whether or not to proceed with the sale.

Petroleum News - Phone: 1-907 522-9469 - Fax: 1-907 522-9583
[email protected] ---