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Marathon Oil applies to state of Alaska for Kenai gas storage lease
Marathon Oil Co. has applied to Alaska’s Division of Oil and Gas for a gas storage lease within the Sterling formation pool 6 C1 and C2 sands of the Kenai gas field. The company wants to establish a gas storage facility that encompasses about 7,531 acres of the pool 6 sands. The reservoir lies in a mix of state, Cook Inlet Regional Inc. and Marathon subsurface land, as well as in multiple tracts of other privately owned subsurface. The lease would only apply to state land within the gas storage facility.
According the draft lease “the Kenai field Sterling Gas Pool 6 is the stratigraphic equivalent of formations occurring between the measured depth of 4,366 feet and 4,569 feet below the surface of the ground in the KU 31-07x well.”
Because pool 6 contains “native” natural gas that has not yet been produced, Marathon will pay state royalties on a percentage of the gas removed from the reservoir, until all recoverable native gas has been extracted. Marathon’s first inlet storage This is Marathon’s first foray into gas storage in the Cook Inlet area. Chevron, another major Cook Inlet gas producer, has already established gas storage facilities in the Swanson River field on the Kenai Peninsula and in the Pretty Creek field on the northwest side of the Cook Inlet. The purpose of gas storage, a response to dwindling gas supplies in the Cook Inlet area, is to enable natural gas to be stored during periods of low demand to help meet peak winter demand.
“It’s become evident over the last several years that storage should play a key role in resolving the Cook Inlet natural gas needs,” John Barnes, Marathon’s Alaska business unit leader, told Petroleum News in July 2005. “Several small projects are either active or proposed. Marathon is working towards a larger storage project in the Kenai gas field. This field has the capacity to store significant volumes of gas which will be needed to address larger seasonal swings.”
Marathon said in September 2005 that the Kenai gas field facility would have the capacity to support annual injection and withdrawals of approximately 10 billion cubic feet at a rate of 60 million cubic feet per day. The company said that it envisages storing its own gas but doesn’t discount providing gas storage services for other gas users at some time in the future.
—Alan Bailey
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