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Aurora still negotiating Cohoe unit Company wants to shoot seismic, drill well on Kenai Peninsula; Nicolai Creek gas storage on hold, needing customer commitments Alan Bailey Petroleum News
Aurora Gas is still negotiating with the Alaska Department of Natural Resources over the potential unitization of some oil and gas leases around the old Cohoe No. 1 well, southwest of Soldotna on Alaska’s Kenai Peninsula, Aurora Gas President Scott Pfoff told Petroleum News Oct. 20. Although state leases within the land targeted for unitization expired on Sept. 30, Aurora filed its unitization application well before that date, Pfoff said.
Bruce Webb, Aurora Gas manager of land and regulatory affairs, told Petroleum News Sept. 22 that the Cohoe leases include two tracts owned by Cook Inlet Region Inc., and that CIRI, the prospective unit manager, had reworked the proposed unit agreement.
Aurora had considered re-entering the Cohoe No. 1 well as a means of preserving the expiring state leases. But Webb said that Aurora’s drilling rig had been in operation at the Three Mile Creek field on the west side of the Cook Inlet, and that it was not possible to move the rig to the Cohoe well location to re-enter the well before the Sept. 30 deadline.
Webb also commented that Aurora does not think that the Cohoe well penetrated the top of the prospect’s geologic structure and that Aurora’s preferred option is to shoot some new seismic and drill a new well at a more appropriate location.
“We’re negotiating with them (DNR) what the work commitment would be, whether it’s 3-D seismic or whether it’s an actual drill of a well, but we do not plan to re-enter the Cohoe well at this time,” Pfoff said.
Nicolai Creek storage Pfoff also commented on Aurora’s proposed gas storage facility in its Nicolai Creek field on the west side of the inlet. The storage project is currently on hold, while potential storage customers focus their attentions on Cook Inlet Natural Gas Storage Alaska’s gas storage project on the Kenai Peninsula, Pfoff said. Potential customers have expressed an interest in Aurora’s storage proposal but no one has yet committed to use the facility, he said.
“We understand the urgency and the need for storage and we’d like to progress it, but we need a utility customer to make it happen,” Pfoff said. “We can’t build it on spec.”
The Nicolai Creek facility would store fairly modest quantities of gas and would likely support high gas deliverability rates during relatively short periods of peak utility gas demand, Aurora has previously said. The gas would be delivered into the gas pipeline network on the west side of Cook Inlet. The CINGSA facility will be somewhat larger and will connect to the gas infrastructure on the inlet’s east side.
“We don’t think that the projects exclude one another,” Pfoff said. “We very much feel that ours is different, in a different location and offers a different type of service from what they are trying to do and they would complement each other.”
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