Weather delays Shell Chukchi Sea drilling
“Alaska North Slope Gas — naturally powerful” read the project logo as ARCO Alaska Inc. announced a project sponsor group to advance the prospects of exporting ANS gas in Anchorage Aug. 11.
ARCO Alaska President Kevin Meyers said that a team will work out of ARCO Alaska’s Anchorage office, with an initial budget of $20 million to look at commercial and engineering issues over 21 months, and the potential to spend $100 million over a four-year period with the goal of making the project economic.
“We hope to achieve breakthroughs,” Meyers said, “in all areas of project development.” The cost of the 800-mile pipeline from the North Slope to Valdez has to be brought down, he said, if the project is going to be successful. “We believe breakthroughs in pipeline technology will help us achieve some of those cost reductions,” he said.
Absent from the sponsor group were ANS gas owners BP Exploration (Alaska) Inc. and Exxon. Meyers said ARCO’s gas alone would not be enough and that other gas owners could come in either as part of the overall project or could simply sell gas at the wellhead.
ARCO Alaska has 37 percent of the project. Foothills Pipe Lines Ltd., owned by TransCanada Pipelines and West Coast Energy Inc., has the second largest share, 22 percent. Terry Cameron, senior vice president of Foothills, said the company brings 25 years of research and development of northern pipelines to the project. Existing Foothills pipelines serve the U.S. Midwest, Pacific Northwest and California, delivering one-third of all Canadian gas to the United States.
Marubeni Corp., a major Japanese trading house which is engaged in the trade of products, materials and goods and also in investment, financing and development of projects including energy resources, has a 17 percent share.
Phillips Petroleum Co. and CSX Corp. through its subsidiary, Yukon Pacific Corp., each have 12 percent shares. Phillips has North Slope acreage with known gas reserves at Point Thomson, and produces gas in Cook Inlet as well as operating the Kenai LNG plant. CSX, an international transportation company, holds a majority interest in Yukon Pacific, which has major permits for an Alaska LNG project.
BRPC drops Putu, most of Beechey Point
Brooks Range Petroleum Corp., operator for the AVCG LLC and Ramshorn Exploration joint venture, said today that the JV partners have voluntarily released exploration acreage in the Putu and Beechey Point units on Alaska’s North Slope.
All of the 21,947 acres in the Putu unit have been released, BRPC said, along with 42,119 acres on the western side of the Beechey Point unit.
BRPC said it still holds just under 100,000 acres on the North Slope in the Southern Miluveach, Tofkat, Kachemach, Beechey Point and pending Telemark units, plus non-unitized acreage still in its primary term.
In letters dated Aug. 31 and posted on the Division of Oil and Gas website today, DNR Commissioner Dan Sullivan approved the Putu unit voluntary termination and division Director Bill Barron approved the voluntary contraction of the Beechey Point unit.
Sullivan said BRPC is relieved of an obligation under the Putu promissory note executed in January to pay DNR an additional $9 million. DNR will collect the $1 million certificate of deposit posted as security under the Putu promissory note and the performance guaranty approved in July, he said.
When DNR approved the Putu unit last October, BRPC was required to post a $10 million performance bond to guarantee performance of a four-well drilling commitment.
The voluntary contraction of the Beechey Point unit, approved by Barron, contracted that unit to seven leases with 10,757 acres.
“The release of this acreage indicates our focus on placing a priority on our near-term Mustang Development Area in the Southern Miluveach Unit with facility construction to begin in 2013, development drilling in 2014 and first oil anticipated in the first half of 2014,” BRPC Chief Operating Officer Bart Armfield said in the company’s statement.
—Kristen Nelson
See stories in Sept. 9 issue, available online on Friday, Sept. 7 at 11 a.m. at www.PetroleumNews.com
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