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North Fork project closer to development Southern Kenai Peninsula unit gets funding for second well, gasline north to KKPL Kay Cashman Petroleum News Publisher & Managing Editor
As reported in last week’s Oil Patch Insider, Alliance Energy of Tulsa, Okla. has agreed to fully fund development of NorthStar Energy Group’s North Fork unit on Alaska’s southern Kenai Peninsula, including ‘fast-tracking’ a pipeline north to connect the gas field with the Kenai Kachemak Pipeline.
Under a farmout agreement between Alliance and NorthStar, development of the North Fork field east of Anchor Point includes drilling a second well, No. 41-36, “as soon as January 2005,” NorthStar President Barry Foote told Petroleum News Aug. 19. (The lion’s share of the North Fork field is held by field operator Gas-Pro, which is owned by NorthStar.) Homer agreement with Enstar gets approved Foote also said the Regulatory Commission of Alaska issued final approval in early July for the gas sales agreement between Enstar Natural Gas Co. and NorthStar, which would bring natural gas from North Fork to the community of Homer. (See related article in the April 11 edition of Petroleum News.)
The agreement provided for 20 years of natural gas delivery from North Fork via a pipeline that Enstar would build to Homer.
Dan Dieckgraeff, Enstar’s manager of finance and rates, told Petroleum News a year ago, when the companies first announced the agreement, that following RCA approval it would probably take a year and a half to two years to begin delivering gas to Homer. Commission approval, he said, was just the first step.
Foote said Aug. 19 that he would be interested “in talking to Enstar” about his company building the pipeline to Homer.
There is a single well at the North Fork field, drilled in 1965. RCA’s approval was contingent on NorthStar drilling at least one additional well to raise proved reserves at the field from 12 billion cubic feet to 14.5 bcf. Willbros, ENSR handling pipeline north Alliance has engaged Willbros Pipeline Engineers and ENSR “to permit and build the pipeline north” to connect with the KKPL, Foote said.
The North Fork unit is on its 39th plan of development with the U.S. Bureau of Land management. The delay in development to date has been because there has been no market for southern peninsula gas. But that situation recently changed with the construction of the KKPL and its recent extension (under construction) to Unocal’s discoveries in the Deep Creek unit on the southern peninsula north of North Fork.
“We’re very pleased about NorthStar’s plans because we want to monetize this asset for the state,” Steve Martinez at BLM told Petroleum News after a recent visit from NorthStar and Alliance executives.
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