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March 2010

Vol. 15, No. 11 Week of March 14, 2010

North Fork rights-of-way applications in

Construction should start in the fall for pipelines connecting new Kenai Peninsula gas field to Anchor Point and Enstar network

Alan Bailey

Petroleum News

In November the Regulatory Commission of Alaska approved a new supply of gas for Enstar Natural Gas Co. from Anchor Point Energy’s North Fork gas field in the southern Kenai Peninsula. And state right-of-way applications have now appeared for the two pipelines needed to deliver gas from the field.

The pipelines will extend the Southcentral Alaska gas pipeline infrastructure south into a part of the Kenai Peninsula with potential for further gas field development.

One pipeline, to be constructed and operated by Anchor Point Energy, will deliver gas west over the seven miles or so from North Fork to Anchor Point on the Cook Inlet coast. Enstar subsidiary Alaska Pipeline Co. will build the second pipeline, to be known as the Anchor Point pipeline, running about 20 miles north from Anchor Point to connect with the Happy Valley extension of the Kenai Kachemak pipeline near Ninilchik. The existing Kenai Kachemak pipeline runs north to connect with other Kenai Peninsula lines.

The Anchor Point pipeline will generally follow the route of the Sterling Highway that runs down the west coast of the Kenai Peninsula.

Dual line possible

In its right-of-way application Anchor Point Energy said that it has not yet decided whether to lay a single 4.5-inch pipeline with a capacity of 9 million cubic feet of gas per day, or dual 4.5-inch lines with a combined capacity of 18 million cubic feet per day from North Fork to Anchor Point. The line (or lines) will be buried and will be manufactured from high-density polyethylene with a glass fiber reinforcement layer. Construction should start in the fall of 2010 in the upland areas of the pipeline route, with the laying of the line in wetlands areas taking place during the winter.

Five river and creek crossings are involved.

Anchor Point Energy anticipates the clearing of the pipeline route taking about a month, the installation of the pipeline taking another month and the construction of a metering building taking three to four weeks. Total construction cost is estimated at $3 million, with the material for the pipeline and ancillary equipment costing another $3 million. Winter construction would require about 40 people, with an additional 50 people required to handle protective matting if any wetlands construction takes place in the fall.

Alaska Pipeline said that it plans to build the Anchor Point pipeline using buried 8.6-inch diameter, coated steel pipe and that the line will have a capacity of 50 million cubic feet per day. The line will pass under eight creeks, with trenching or directional drilling techniques being used for the crossings. Work on the pipeline should start in September 2010 and take about 10 months to complete, with pipeline operation expected to start in July 2011. Total construction cost is estimated at about $15.9 million, with the required materials costing an additional $5.4 million. Construction will require 40 to 50 people.

Discovered in 1965

Standard Oil of California originally discovered gas at North Fork when it drilled a well there in 1965 when searching for oil in the area. However, the drilling of a second North Fork well by Armstrong Cook Inlet in 2008, to confirm the size of the gas resource, opened the possibility of developing the field. Armstrong, the company that remains the field operator, subsequently established Anchor Point Energy, a company formed from the five North Fork unit working interest owners, to contract with Enstar for the sale of North Star gas and to build the gas line from the field to Anchor Point.






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