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Northstar’s Homer gasline project moves forward
Kay Cashman PNA Publisher
Following meetings with state, federal and Homer officials in late September, Northstar Energy Group Inc. told PNA it is moving forward with plans to build a natural gas pipeline to Anchor Point and Homer. The Tulsa-based independent, which purchased Alaska-based Gas-Pro LLC in 2000 and is the operator of the North Fork unit north of Homer, also said it plans to merge in the near future with a firm that will significantly expand Northstar’s gas marketing and pipeline operational capabilities, but would not identify the firm.
In May, following Kenai Kachemak Pipeline LLC’s announcement it would terminate its Kenai Kachemak gas pipeline in Ninilchik versus Anchor Point or Homer, Northstar said it was looking at building a line to connect its North Fork unit and other stranded gas properties to Anchor Point and then north to Ninilchik and south to Homer.
KKPL is jointly owned by Marathon and GUT LLC, a wholly owned subsidiary of Unocal Corp. ConocoPhillips Alaska Inc. owns approximately 23 percent of the participating area of the North Fork unit, but Northstar said is not involved in Northstar’s pipeline plans.
KKPL’s change spurs Northstar Northstar had responded to KKPL’s open season letter, issued in December of last year, saying it intended to “reserve up to 40 million cubic feet per day of capacity” in the new line.
Anticipating the Kenai Kachemak gas pipeline would extend to Anchor Point, Northstar had tested an existing well at its North Fork field, acquired additional leases at North Fork and began planning “an aggressive development drilling program,” Larry Snead told PNA Oct. 2. Snead is in charge of Northstar’s land and legal matters.
In late April, when KKPL said it would terminate its gas transmission line at Ninilchik, Northstar began to look for investors to build its own pipeline.
Construction of KKPL’s pipeline is expected to begin early next year and be complete by October. No timelines have been established by Northstar, which is currently in the pre-permitting stage.
Might go north and south with lines According to state officials who met with Northstar at the end of September, the company is looking at the possibility of building eight inch gathering lines from North Fork to both Anchor Point and the Ninilchik terminus of KKPL’s line, as well as a four inch transmission line to Homer.
Snead said Northstar “has purchased data from Unocal that was gathered in the assessment of the route for the KKPL line from Anchor Point to Homer and has also retained Michael Baker Jr. Inc. to provide feasibility studies and engineering support.” Michael Baker was the lead engineering firm for KKPL’s project.
Snead also said “Schlumberger has recently completed an assessment of current well costs to support Northstar’s efforts to continue with the development of the gas and oil reserves at the North Fork field,” something that will remain “an objective for the company” despite the fact that Northstar told the state that the North Fork unit’s gas well, number 4135 on a federal lease, is capable of supplying Homer with natural gas for 15 years.
“The number that has been around for that well is 12 billion cubic feet,” a state official told PNA Oct. 1.
“Northstar said they tested the well in October, last year, and it flow tested at about 4 million cubic feet a day from one interval at 8,500 feet. That’s sort of a minimum to declare a well commercial. They said there were six more intervals, but that’s all the detail they gave,” the state official said.
In May, Northstar said the well tested “at more than 4.2 million cubic feet of gas per day from one sand” and that “other test information indicated that significant additional production could be achieved by perforating other sands in the well.”
Prospects for development good The state official said the North Fork unit has been shut in since 1965 for lack of a pipeline to market. “The same goes for Falls Creek and all the prospects along the highway. … There has never been a pipeline to market for the gas. Now there is a potential shortage of gas, so the prospects for development are good.”
He said the unit was originally “much larger and contracted down to the participating area boundary. … I would say it’s a good hunch that the prospect is larger than the existing unit or maybe there’s more than one prospect.”
Northstar is looking at more than one option for marketing gas in Homer, including marketing to commercial users, such as schools and the local hospital, and applying for a certificate from the Regulatory Commission of Alaska that would allow the company to market the gas to all area users, including residential.
“Now that we have gas marketing and pipeline operating specialists coming into our company with the merger, we have a lot of options,” Snead said.
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