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Escopeta lays out development options Company prefers outrigger caisson or three-deck platform for Kitchen Lights unit depending on whether it discovers oil, gas or both Eric Lidji For Petroleum News
Escopeta Oil Co. believes it could produce natural gas from its offshore Kitchen Lights unit as soon as 18 months after making a discovery, if the company faces no interference.
“This is just full steam ahead,” Vladimir Katic, the Alaska project manager for the Houston-based independent, told the Senate Resources Committee on Oct. 20.
Earlier this year, Escopeta became the first company to start drilling an exploration well in Cook Inlet using a jack-up rig in nearly 20 years, but the company won’t know its future as a potential developer in the state until it finishes drilling Kitchen Lights Unit No. 1.
“We’re quite confident that we will find oil and gas,” Katic said.
Escopeta needs to find about 150 billion cubic feet of natural gas and/or 50 million to 100 million barrels of oil to justify its development, Katic said. The company is considering four development options and already favors two potential schemes.
Prefers outrigger caisson Should the company produce only natural gas at Kitchen Lights, it favors a six-well campaign using an outrigger caisson platform, or a 14-foot diameter post, similar to one leg of Osprey platform, Katic said, filled with conductors going down to the sea floor.
Simultaneously, Escopeta would build a pipeline either to ConocoPhillips’ Tyonek platform to the north or to the onshore East Foreland production facilities to the south.
The module could be built in Anchorage, or even in Kenai, Katic said, but he also noted that this precise development option has never been tried in Cook Inlet before. That said, by going “full steam ahead” the caisson option could deliver natural gas to the grid within 18 months from discovery and is “by far” the cheapest option, according to Katic.
“I certainly hope that does happen,” House Speaker Mike Chenault said about the fast development plan free of interference, “but we’re kidding ourselves if we think it will.”
Escopeta could also use a subsea completion strategy at Kitchen Lights, constructing a wellhead on the sea floor surrounded by a cage to protect against drifting objects.
That option is more expensive and more complicated than a caisson, untried in Cook Inlet and problematic for repairs or emergency response during the ice season, Katic said.
Different plans for oil Should Escopeta discover both oil and natural gas at Kitchen Lights, Katic said the company favors either a two-deck platform similar to the one in place at Osprey, or a three-deck platform similar to the one at Steelhead, depending on production volumes.
Escopeta is favoring the three-deck platform, Katic said, because the two-deck platform requires special installation considerations for the water depths at the Kitchen Lights unit and is limited to a 28-well capacity, which might not work for a larger discovery.
The three-deck platform can handle 32 wells and deeper waters, but requires a heavy lift barge for installation and is more expensive than the two-deck platform, Katic said.
Those platform options would take more than 30 months to bring online, Katic said.
Escopeta is currently estimating production of 50 million cubic feet of natural gas and 12,000 barrels per day of oil, requiring a 10-inch natural gas pipeline and an 8-inch oil pipeline to either the East Foreland production facilities or new onshore facilities.
Hopes to drill later Escopeta halted drilling the KLU No. 1 at 4,933 feet earlier in October at the request of Alaska Department of Natural Resources officials concerned about safety issues, but recently got the go-ahead to continue toward its ultimate target in the Jurassic zone.
While the company currently is required to stop drilling by the end of October, Escopeta Vice President Bruce Webb said Escopeta is meeting with state officials and hopes to get an extension because of predictions the ice season will begin late this year.
Once drilling is done for the season, Escopeta plans to move the rig to either Port Graham or Seward, according to Webb, but the company would prefer to bring the rig to Port Graham because it keeps the giant machine out of the harsher waters of the Gulf of Alaska.
The company is also working to lower a $15 million fine from the U.S. Department of Homeland Security for allegedly violating the federal Jones Act. Webb said the company plans to argue the need for natural gas in Southcentral, including at military installations, and noted that the fine is an automatic amount based on the value of the rig.
The company has 60 days to appeal the fine.
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