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Furie about to start KLU A-2 well
During the week of Sept. 11 Furie Operating Alaska expects to start the drilling of the KLU A-1 development well in its Kitchen Lights gas field, Bruce Webb, Furie senior vice president, told Petroleum News in a Sept. 6 email. Currently the company is hooking up the wellhead of the KLU A-2 well that it drilled and completed this summer. The company must complete flow testing of the A-2 well before starting the drilling of the A-1 well, Webb explained. Furie is using the Randolf Yost jack-up rig, stationed at the Julius R gas production platform, to conduct the drilling.
Producing from KLU No. 3 Gas production from the field comes from the KLU No. 3 well, originally drilled as an exploration well but later converted for production. Furie is supplying gas to Homer Electric Association, for power generation, and to Aurora Gas, for supply to the Tesoro oil refinery at Nikiski on the Kenai Peninsula.
An additional contract to supply gas to Enstar Natural Gas Co., the main Southcentral Alaska gas utility, comes into effect in 2018 but is contingent on Furie drilling two Kitchen Lights development wells this year.
Webb said that, with the KLU No. 3 well having more than enough capacity by itself to support Furie’s currently operating gas supply contracts, the company cannot justify the cost of fully completing the A-1 well this year - presumably it will drill the well to target depth and then suspend the well for future completion. However, the company has fully completed the A-2 well.
“Having the A-2 well on line is a good insurance policy for production/deliverability,” Webb said.
He said that in preparation for the Enstar contract Furie anticipates drilling another development well, the KLU A-3, and completing both the A-1 and the A-3 wells, in 2017.
Under capacity Although information about the size of the Kitchen Lights field has not been made public, it is clear that the field is operating well under capacity.
Currently Furie’s contract with Homer Electric allows for the supply of 12 million to 18 million cubic feet of gas per day, depending on the time of year. The Enstar contract anticipates gas delivery rates in the range of 10 million cubic feet to 22 million cubic feet per day. With the single subsea pipeline that delivers gas from the Julius B platform to Furie’s gas processing facility in the Kenai Peninsula having a capacity of 100 million cubic feet per day, Furie has in the past said that it hoped for initial production of 85 million cubic feet per day from the Kitchen Lights field. And Furie’s development plan for the field envisages the eventual construction of two 100 million-cubic-feet-per-day subsea pipelines from the offshore platform.
Although there is a predictable market for the supply of local utility gas from the Cook Inlet basin, that market is small and it tends to be captured by relatively long-term gas supply contracts. Another potential market for Cook Inlet gas is a liquefied natural gas export facility operated by ConocoPhillips on the Kenai Peninsula. But, because of difficult market conditions, with low LNG prices, ConocoPhillips is not currently exporting LNG from the plant. Agrium Inc. has been considering re-opening its fertilizer plant on the Kenai Peninsula - that plant uses natural gas as feedstock. And two companies have been considering building additional LNG plants on the shores of the Cook Inlet - one primarily for the supply of gas to Japan and the other for LNG supplies for the Alaska Interior in conjunction with the Alaska Industrial Development and Export Authority’s Interior Energy Project.
- ALAN BAILEY
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