Cook Inlet gas reviewNew DOG report says existing fields have 1,183 billion cubic feet remaining ALAN BAILEY Petroleum News
Alaska’s Division of Oil and Gas has published a new assessment of the amount of natural gas that could be produced from active oil and gas fields in the Cook Inlet basin. The report says that it appears that the fields, having produced 8,308 billion cubic feet of gas since development of the basin began in the 1950s, could produce another 1,183 billion cubic feet.
This assessment is based on the continuing development of existing productive oil and gas pools, and does not include potential gas from undeveloped pools or pools yet to be discovered. The results do not reflect potential gas production from the Cosmopolitan and Kitchen Lights fields, under development in Cook Inlet.
Increased estimate The new gas volume estimate represents a slight increase relative to an assessment of 1,142 billion cubic feet of remaining gas that the Alaska Department of Natural Resources published in 2009. However, the earlier study predated about six years of more recent gas production from the basin and documented some geologically identified resources not included in the new study - the new study pushes up the estimated ultimate gas recovery from existing fields from 8,889 billion cubic feet to 9,491 billion cubic feet.
And the new report comments on the major uptick in gas development activity that has taken place since Hilcorp Alaska entered the Cook Inlet oil and gas industry in 2011 and subsequently took over operation of many of the region’s oil and gas fields.
The report says that questions over whether Cook Inlet gas supplies would be adequate to support new sources of gas demand prompted a re-visit of the Cook Inlet gas reserves question. Potential future demand may come from ConocoPhillips’ liquefied natural gas facility at Nikiski on the Kenai Peninsula; from a re-opening of the Agrium fertilizer plant, also at Nikiski; from exports of LNG to Japan by Resource Energy Inc.; from the supply of gas to the Donlin Creek gold mine near McGrath; and from the delivery of LNG to the greater Fairbanks area.
Two estimation techniques For the new study a team of three reservoir engineers used publicly available data from the Alaska Oil and Gas Conservation Commission to make projections of Cook Inlet gas production using two techniques: decline curve analysis and material balance. The decline curve approach takes the documented gas production decline curves for existing oil and gas wells and projects these curves into the future, on the assumption that the wells will continue to perform in line with their historic characteristics, but that no new wells will be drilled. The material balance approach considers the known characteristics of each established oil or gas pool and projects how much gas might be produced from the pool, assuming both continued production from existing wells and the drilling of new development wells, as appropriate.
Neither approach considers economic factors such as the commercial viability of remediating existing wells or of drilling new wells. Nor does the assessment consider potential production constraints such as seasonal gas demand variation, demand limitations or limitations in the gas delivery infrastructure, the report says.
Proved and probable reserves The decline curve analysis resulted in an estimate of proved gas reserves in the basin, gas known to exist and with relative certainty of production. That volume turned out to be 711 billion cubic feet, a volume representing a minimum of future production assuming no further field development. Material balance analysis added probable reserves into the equation, with those probable reserves representing gas volumes likely to be developed as a consequence of increasing oil and gas field investment. It was the material balance evaluation, plus assumptions regarding the recompletion of some existing wells, that led to the figure of 1,183 billion cubic feet in proved and probable reserves.
The report says that, of the producing fields in the Cook Inlet basin, the North Cook Inlet, Beluga River, Kenai and Ninilchik fields appear to have the highest remaining gas reserves bases, with these being the only fields with estimated remaining reserves in excess of 100 billion cubic feet. The North Cook Inlet field leads the reserves volume table with an estimated proved and probable reserves volume of between 300 billion and 350 billion cubic feet. The Beluga River field, the next largest, has proved and probable reserves of about 200 billion cubic feet, the report says.
In addition to gas reserves known to exist in association with producing Cook Inlet oil and gas fields, in 2011 the U.S. Geological Survey published an estimate that 19,000 billion cubic feet of natural gas lie undiscovered in the Cook Inlet basin.
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