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Kenai line planned to connect Red Pad gas Alaska Pipeline, Hilcorp working jointly on 10-mile line to bring stranded natural gas from 2004 discovery into Enstar system Kristen Nelson Petroleum News
Natural gas from a 2004 discovery will be connected to Kenai Peninsula infrastructure by early next year under a proposal from Semco Energy subsidiary Alaska Pipeline Co. now before the Regulatory Commission of Alaska.
APC has applied to extend its authorized service area to include the route of the Red Pad Pipeline to be constructed on the southern Kenai Peninsula between Hilcorp Alaska LLC’s Red Pad and APC’s Anchor Point Pipe Line.
APC told RCA in a Sept. 14 filing that Hilcorp has stranded gas at its Red Pad northeast of Anchor Point, some 10 miles east of APC’s Anchor Point Pipe Line.
Hilcorp has requested that the line be placed in service on or before Jan. 1 of next year, APC told the commission, and said that “based upon the accelerated material acquisition program by both Hilcorp Alaska and APC, and the construction contract already awarded, APC anticipates that the Red Pad Pipeline will be complete and ready to accept gas by early December 2012.”
APC also filed a motion for expedited consideration of the application.
APC said Hilcorp has a well which is currently shut-in and requested that APC expand its pipeline system on the southern Kenai Peninsula so that stranded gas “and gas from subsequent drilling efforts” can be made available to the Southcentral Alaska market.
Discovery in 2004 The Red Pad is in the Nikolaevsk unit northeast of the Armstrong Cook Inlet North Fork unit at the southern end of the Kenai Peninsula, some 14 miles southeast of Ninilchik and four miles northeast of the community of Nikolaevsk in an upland logged area.
Union Oil Company of California found natural gas in 2004 at the Red No. 1 well. The unit and Red Pad have since changed hands twice: Chevron acquired Unocal in 2005 and in July 2011 Hilcorp acquired Union’s Cook Inlet assets.
In an agreement with the Alaska Department of Natural Resources Division of Oil and Gas in early 2011, Union had agreed to study the possibility of a line from the Red Pad, although the original proposal was a line south to North Fork, to connect to the line Armstrong Cook Inlet was building to connect with the 21-mile extension of its existing line on the Kenai Peninsula APC had completed.
Production from North Fork through a new line connecting to an APC extension began in early 2011.
Pipe already purchased The pipe for the Red Pad Pipeline has already been purchased by Hilcorp, APC told RCA, and Hilcorp “has arranged for its expedited transportation to the construction site.” APC said a majority of the pipe is already in Alaska, most of it at the job site, and with a contract for the major construction contractor awarded, construction crews were already working at the site in mid-September.
APC said Hilcorp was also providing a contribution in aid of construction to fund the construction.
Daniel Dieckgraeff, director of rates and regulatory affairs for APC and Enstar Natural Gas Co., said APC has two gas supply agreements with Hilcorp, and currently has unmet gas supply requirements for 2013 and beyond.
Documentation provided to RCA shows a total project cost of $8.4 million.
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