Providing coverage of Alaska and northern Canada's oil and gas industry
March 2019

Vol. 24, No.12 Week of March 24, 2019

Kitchen Lights pipeline cleared, gas production to be restored

Alan Bailey

Petroleum News

Furie Operating Alaska has cleared the obstruction that had been blocking the subsea pipeline that carries gas from the company’s Kitchen Lights gas field in Cook Inlet, Scott Pinsonnault, Furie chief operating officer, told Petroleum News in a March 19 email.

“We have safely restored utility and communication between our onshore natural gas processing plant and the Julius platform over this past weekend,” Pinsonnault said, referring to the field’s offshore Julius R production platform. He said that Furie will spend the next few weeks making sure that the line is completely clear, functional and safe before restoring gas production from the field.

Pinsonnault said that “a very cooperative cadre of resources spread throughout the United States” had participated in clearing the line and that the clearing had been accomplished through the use of mechanical intervention.

Started Jan. 5

Furie started experiencing problems on Jan. 5, when, following a particularly cold spell of weather on the Kenai Peninsula, the company encountered difficulty with its gas delivery system from the Kitchen Lights field. It appeared that the low temperatures were causing hydrate plugs to develop both at the field’s onshore processing facility and in the 15-mile subsea pipeline that runs between the Julius R platform and the onshore facility. The unprocessed gas from the platform contains water that is removed in the facility - presumably under low temperature conditions the freezing water would combine with the gas to form solid hydrates.

The pipeline became completely blocked on Jan. 11, from which point Furie became unable to produce gas from the field. Initially Furie was able to continue to meet its contractual obligations by purchasing gas and using gas that it had previously warehoused in storage.

Enstar gas supply

Particularly critical was a gas supply agreement with Enstar Natural Gas Co., the main gas utility in Southcentral Alaska. Under that agreement Enstar anticipated receiving more than 20 percent of its gas supplies from Furie. On Jan. 23 Furie declared Force Majeure, notifying Alaska Pipeline Co., the Enstar gas transportation affiliate, that the blockage in the Kitchen Lights gas transportation system prevented the delivery of gas from the field.

Enstar told Petroleum News on Jan. 29 that Enstar had not received contracted volumes of gas from Furie since Jan. 19. Warmer weather had somewhat softened utility gas demand and Enstar had been able to use gas that it had stored in the Cook Inlet Natural Gas Storage Alaska facility on the Kenai Peninsula to compensate for the gas supply shortfall.

Notice of default

On Feb. 11, with the problem still not resolved, APC sent a formal notice to Furie, declaring that Furie was in default under the supply agreement. Under the terms of the agreement, the parties involved had 20 days to work out an acceptable means of resolving the issue, with failure to agree on an acceptable solution within that timeframe resulting in termination of the supply contract.

On March 13 Lindsay Hobson, Enstar communications manager, told Petroleum News that the deadline for the default notice had passed and that “the parties are involved in extensive discussions about the proper path forward.” Hobson commented on March 20 that the situation remained unchanged.


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