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Marathon ready for LNG plant closure
Marathon Oil Co. is positioned to deal effectively with reduced Cook Inlet gas demand following the shutdown of the Nikiski LNG plant, Carri Lockhart, production manager for Marathon’s Alaska operations, told state lawmakers during a House Resource Committee “lunch and learn” session on March 31.
There have been concerns that the shutting in of Cook Inlet gas wells during the summer following the loss of LNG production would permanently damage wells, thus compromising the deliverability of utility gas during peak Southcentral gas demand in the winter. But, as a minority owner of the LNG plant, Marathon’s development and production strategy has never assumed that the plant would continue in operation indefinitely, Lockhart said.
“The closure of the plant does not impact my operations from a deliverability standpoint,” she said.
Gas storage The key to Marathon’s ability to handle extreme swings in total gas demand between winter and summer, now that LNG is no longer being exported during the summer, is the company’s gas storage facility in its Kenai gas field. That storage facility has enough capacity to handle all of Marathon’s summer gas production, thus enabling wells to continue to operate year-round, Lockhart said.
In addition, in its Ninilchik gas field Marathon has been testing new technology to stabilize well production that would otherwise be rendered erratic as slugs of water enter a well from a gas reservoir.
“We’ve had some great, great success in Ninilchik,” Lockhart said. “It’s been very beneficial.”
And, with water encroachment into a well being the main source of well damage when a well is shut in or production is slowed down, Marathon thinks it will be able to use that same technology to throttle back its wells without incurring well damage, Lockhart said.
Support contracts While emphasizing the critical importance of worker safety in Marathon’s operations, Lockhart said that the company’s focus is on supporting its gas supply contracts with its customers, both through well remediation and through the drilling of new wells. The company drilled or participated in four new gas wells in 2010, she said.
And Marathon is encouraged with progress in Regulatory Commission of Alaska approval of new utility gas supply contracts, Lockhart said.
“Without contracts, companies will not drill,” she said.
Lockhart said that Marathon is also reprocessing some seismic data — in an Anchorage Energy Task Force meeting in March she said that the seismic data relates to the Beaver Creek unit on the Kenai Peninsula.
—Alan Bailey
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