The Regulatory Commission of Alaska issued an order May 11 granting Aurora Gas immediate interim access to the Cook Inlet Gas Gathering System to transport gas from its Nicolai Creek unit until the CIGGS case in front of the commission is decided in November.
Aurora President Scott Pfoff said the company was geared up to pump gas from three Nicolai Creek wells into CIGGS, which moves natural gas from the west side of Cook Inlet to the east side, as soon as commercial agreements were in place with CIGGS owners Marathon and Unocal.
Pfoff said two compressors at the ConocoPhillips-operated Beluga gas field were due to go down for maintenance early Saturday morning May 14; the Nicolai Creek gas would replace that gas in the Cook Inlet system.
“We’re actively talking to both Marathon and Unocal. Everyone is cooperating. We hope to reach an agreement in the next 48 hours,” he said at 3:30 p.m. Alaska time on May 11.
“The RCA order gives us interim access to CIGGS until the commission makes a final ruling on the CIGGS case. It is a very specific exemption for Aurora for the Nicolai Creek unit,” Pfoff said.
Motion filed by all parties
The order was in response to a motion filed May 9 by all parties to the pending CIGGS case in which the commission is trying to determine if it should regulate CIGGS as a common carrier pipeline or as a utility. The initial complaint was brought by Agrium U.S. on Oct. 1 against CIGGS owners Marathon Oil and Unocal. Agrium wants CIGGS to be regulated as a common carrier pipeline system. CIGGS has been operated as an unregulated pipeline facility since 1972 before the 1974 passage of the Alaska Right-of-Way Leasing Act, and because of that is not regulated under the act.
Enstar Natural Gas, Aurora Gas, Aurora Power Resources and the state of Alaska are also parties to the proceeding.
Discovered by Texaco in 1968
The Nicolai Creek gas field was discovered by Texaco in the 1960s when companies were looking for oil in the Cook Inlet basin. Marathon and Unocal acquired the field in 1988, eventually assigning their interests to Aurora in November 2000.
Aurora went back into Nicolai Creek, which is one of several Cook Inlet fields eligible for state royalty relief, and started producing gas again, beginning with production from one of the Texaco wells, the NCU-3, in September 2001.
Aurora subsequently drilled and tested a sidetrack and a new well; and re-completed a second of the three original wells.
Nicolai was Aurora’s first operated production in Alaska where the company has focused on developing known Cook Inlet basin gas accumulations which were never produced or, like Nicolai, were no longer in production.
Aurora Gas’ initial contract with CIGGS’ owners ended at the end of 2004, which left the company with no way to get its Nicolai gas to market, so the field was temporarily shut-in.
“We shut the field in because CIGGS is not yet a common carrier or even a contract carrier,” Pfoff told Petroleum News March 23.
“We’re not spending as much time developing the field until we get some of these regulatory and commercial issues ironed out,” he said. “We see a lot of potential out there and we have some new targets, but until we have a pipeline we can ship our gas through, we won’t be” spending a lot of money on the field.
Aurora told the state in October that “an extensive review and interpretation of the existing 3D seismic data will possibly lead to a new development well which will target stacked Carya 2 (Upper Tyonek) channel sands” in the Nicolai unit.
