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NEWS BULLETIN

March 03, 2007 --- Vol. 13, No. 21March 2007

Gas-Pro plans CNG production at North Fork

In its 42nd plan of development for the North Fork Unit in Alaska’s southern Kenai Peninsula, Gas-Pro Alaska proposes trucking compressed natural gas from the North Fork well to the Kenai Kachemak pipeline. The company hopes to start production on or before June 1, 2007, and produce 500,000 cubic feet of gas per day within the first month of operation. Production would ramp up to 1 million cubic feet per day on or before June 1, 2008.

Gas production from North Fork has in the past been contingent on the construction of a pipeline connecting the well to a proposed southern extension of the Kenai Kachemak pipeline to the city of Homer. But pipeline construction has in turn been contingent on the drilling of a second North Fork well, to prove adequate North Fork gas reserves to justify the pipeline construction.

But Gas-Pro now says that gas market conditions in Southcentral Alaska make the production of CNG from a single well a viable proposition. The company says that it has “an agreement in principle with a major/large user … for the purchase of up to 2 million cubic feet per day from the North Fork Unit No. 41-35 well, … has signed a non-disclosure agreement with Chugach (Electric) with the intention of entering into a gas supply contract with them,” and is negotiating with Agrium “concerning the provision of gas to its Nikiski fertilizer plant.”

Editor’s note: See full story in the March 11 edition of Petroleum News which will be available online on Friday noon, March 9.

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