RCA OKs Anchor Point Energy application
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Kristen Nelson Petroleum News
An impediment to Hilcorp Alaska's purchase of the North Fork unit on the southern Kenai Peninsula was removed in late April.
As a condition of the purchase, Hilcorp Alaska required a change in the regulation of the pipeline serving the unit.
The North Fork Pipeline had been regulated by the Regulatory Commission of Alaska as a common carrier pipeline, with a certificate of public convenience and necessity.
The pipeline only ever served to carry North Fork unit natural gas.
In its April 22 decision revoking the CPCN for the pipeline, RCA said the 8-mile line runs from the North Fork gravel pad to a tie-in with the Alaska Pipeline Co.'s Anchor Point Pipeline. It consists of two 4.5-inch pipelines. The commission later approved another delivery point on the North Fork Pipeline, facilitating sale of natural gas to Enstar and a new distribution system in Nikolaevsk.
The line was constructed as a gathering line, RCA said, "needed solely to perform a contract for the sale of gas."
The application of Anchor Point to the commission said that when the CPCN was issued, exploration was underway east and north of the North Fork unit which could have resulted in transmission of natural gas from multiple shippers, but exploration east of the unit was unsuccessful and a separate pipeline was built to transport gas from north of the unit.
RCA said the North Fork Pipeline only required regulation as a common carrier because it had a right-of-way lease with the state. If that right-of-way lease was converted to an easement or other land use, RCA said, the source of its jurisdiction over the line is eliminated.
The commission said a condition of its revocation of the CPCN was that the Alaska Department of Natural Resources address the land use authorization. The State Pipeline Coordinator's Section of DNR's Division of Oil and Gas issued a notice of application March 7 for a private non-exclusive easement for the North Fork Pipeline, following an application from Vision Resources in February requesting authorization to relinquish the state right of way for the line and convert the authorization to a private non-exclusive easement.
RCA said Anchor Point Energy filed a copy of the decision issued by DNR in April, demonstrating that the lease under the Right-of-Way Leasing Act had been converted to an easement issued under the Land Use Act. That act, RCA said, does not require that it regulate the North Fork Pipeline.
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