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May 11, 2005 --- Vol. 11, No. 44May 2005

RCA grants Aurora access to CIGGS for Nicolai

The Regulatory Commission of Alaska issued an order today granting Aurora Gas immediate interim access to the Cook Inlet Gas Gathering System to transport gas from its Nicolai Creek unit until the CIGGS case in front of the commission is decided in November.

Aurora President Scott Pfoff said the company was geared up to pump gas from three Nicolai Creek wells into CIGGS, which moves natural gas from the west side of Cook Inlet to the east side, as soon as commercial agreements were in place with CIGGS owners Marathon and Unocal.

Pfoff said two compressors at the ConocoPhillips-operated Beluga gas field were due to go down for maintenance early Saturday morning; the Nicolai Creek gas would replace that gas in the Cook Inlet system.

“We’re actively talking to both Marathon and Unocal. Everyone is cooperating. We hope to reach an agreement in the next 48 hours,” he said at 3:30 p.m. Alaska time on May 11.

“The RCA order gives us interim access to CIGGS until the commission makes a final ruling on the CIGGS case. It is a very specific exemption for Aurora for the Nicolai Creek unit,” Pfoff said.

The order was in response to a motion filed May 9 by all parties to the pending CIGGS case in which the commission is trying to determine if it should regulate CIGGS as a common carrier pipeline or as a utility. The initial complaint was brought by Agrium U.S. on Oct. 1 against CIGGS owners Marathon Oil and Unocal. Agrium wants CIGGS to be regulated as a common carrier pipeline system. CIGGS has been operated as an unregulated pipeline facility since 1972 before the 1974 passage of the Alaska Pipeline Act, and because of that is not regulated under the pipeline act.

Enstar Natural Gas, Aurora Gas, Aurora Power Resources and the state of Alaska are also parties to the proceeding.

USGS re-assesses the central North Slope

The U.S. Geological Survey has published the results of its new assessment of potential oil and gas reserves under the central North Slope of Alaska. The assessment area lies between the NPR-A and the ANWR. The area includes mainly state and Native lands extending northward from the Brooks Range to the state-federal offshore boundary in the Beaufort Sea.

The assessment indicates the possibility of between 2.6 billion and 5.9 billion barrels of undiscovered, technically recoverable oil in the area, with a mean of 4.0 billion barrels. There is a possibility of between 23.9 trillion and 44.9 trillion cubic feet of undiscovered, non-associated natural gas, with a mean of 33.2 tcf. The assessment estimates a mean of 4.2 tcf of associated natural gas and 387 million cubic feet of natural gas liquids.

The estimates come from an analysis of 24 oil and gas plays that encompass virtually all of the stratigraphic and structural elements of the North Slope geology. USGS assumed minimum accumulation sizes of 5 million barrels of recoverable oil and 100 billion cubic feet of recoverable natural gas.

The estimated reserves do not include known reserves from producing oil fields in northern Alaska — most of these fields lie within the study area.

A 2002 USGS assessment of the NPR-A indicated mean recoverable oil reserves of 10.6 billion barrels and mean recoverable gas reserves of 61.4 billion cubic feet for that region. And the 1998 USGS assessment for the Alaska National Wildlife Refuge estimated 10.4 billion barrels of oil there. MMS has in the past estimated a mean of 6.96 billion barrels of oil and 32.07 tcf of natural gas under the outer continental shelf of the Beaufort Sea.

Editor’s note: See stories in May 15 issue of Petroleum News.

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