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Lawsuit over Alaska’s Beluga unit ends Parties including Hilcorp, ConocoPhillips and ML&P apparently settle dispute over gas field; companies keep the details private Wesley Loy For Petroleum News
A lawsuit between partners in Alaska’s Beluga River natural gas field, a key source of energy for the state’s main population center, apparently has been settled.
The case first began in June 2010 when Chevron U.S.A. Inc. and its affiliate, Union Oil Co. of California, sued ConocoPhillips Alaska Inc. in state Superior Court in Anchorage. Municipal Light & Power, an Anchorage electric utility, also was a defendant.
Hilcorp Alaska LLC became the plaintiff after it took over Chevron’s Cook Inlet oil and gas assets Jan. 1.
The breach of contract suit centered on a “gas balancing agreement” between the Beluga stakeholders. At the time the suit was filed, Union, ML&P and field operator ConocoPhillips each held a one-third working interest in the Beluga River unit.
Located on the inlet’s west side, the Beluga field long has been an important gas supplier for the Anchorage area.
High-stakes dispute Petroleum News reported in its June 5, 2011, issue that the case appeared to involve a disputed sum of at least $32 million.
But on Aug. 27, lawyers representing all three companies filed a “stipulation for dismissal with prejudice.”
The two-page filing said each party would bear its own costs and attorney fees, but it provided no terms of the apparent settlement. Superior Court Judge Eric Aarseth dismissed the case on Aug. 30.
“We will not be making any public comments regarding the Beluga situation,” Hilcorp spokeswoman Lori Nelson told Petroleum News.
Natalie Lowman, spokeswoman for ConocoPhillips, likewise said she couldn’t provide any details on the settlement.
What the suit alleged The gas balancing agreement between Beluga’s working interest owners established the amount of gas each owner could take from the field each year, court documents said.
An owner that elected to take less than its participating interest in unit production was said to have “underlifted” its share. If another owner with a use or market for the gas took more than its participating interest, that was an “overlift.”
Under the agreement, an underproducer each year could elect to either receive a cash settlement or take additional production in future years to resolve the gas imbalance.
Union contended in the lawsuit that it was an underlifted party in 2009 and 2010, but that overlifter ConocoPhillips failed to pay the full settlement Union expected.
The suit also alleged “conversion,” saying ConocoPhillips took more Beluga gas than it was entitled to with the intent to “profit from the sale of Union’s property.”
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