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NEWS BULLETIN

December 12, 2001 --- Vol. 7, No. 154December 2001

Unocal, Marathon going forward with Kenai Kachemak pipeline project

Unocal Alaska and Marathon Oil Co. said Dec. 11 that they have formed the Kenai Kachemak Pipeline LLC, which will be the primary developer of a new natural pipeline.html'>gas pipeline system on the southern Kenai Peninsula. The newly formed company will provide natural gas supplies to industrial customers and to utilities for distribution to residential and commercial users throughout Southcentral Alaska, the companies said in a statement.

A conceptual study was begun a year ago. The first phase of the pipeline between the Ninilchik and Kenai gas fields is planned to be operational by the beginning of 2004.

"Our study shows that a pipeline system in the region in feasible; therefore Unocal and Marathon will move forward with detailed engineering and permitting," said Charles Pierce, vice president for Unocal Alaska.

John Barnes, manager of Marathon's Alaska business unit, said his company looks forward to working with Marathon to prove up necessary natural gas on the companies respective prospects and bring the gas to market.

"A significant portion of Marathon's capital spending next year in Alaska will e directed toward increasing natural gas resources that can be produced through the new pipeline," Barnes said.

The companies said that the ultimate capacity and route of the pipeline system is dependent on future results of gas exploration drilling on the Kenai Peninsula.

The current plan calls for the pipeline to be installed in phases between existing pipelines in the Kenai gas field and the Anchor Point area. A possible pipeline segment between Anchor Point and Homer has been proposed as a distribution line to be constructed and owned by Enstar. The pipeline route will essentially follow the Alaska Department of Transportation right of way easements along the Sterling Highway, the companies said. Initial pipeline surveying of the route has begun.

A public meeting is scheduled in Anchor Point Dec. 13 to provide additional information and solicit public feedback.

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