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DNR approves Pretty Creek gas storage lease Lease issued to Unocal (now part of Chevron) first gas storage lease state has approved; Swanson River storage on federal land Alan Bailey Petroleum News Staff Writer
On Oct. 6 the Alaska Department of Natural Resources approved a lease to allow Unocal (now part of Chevron) to store natural gas in a near-empty reservoir of the aging Pretty Creek gas field on the west side of Cook Inlet. As reported in the Sept. 25 edition of Petroleum News, the state issued its best interest finding for gas storage at Pretty Creek on Sept. 13.
“There’s a significantly higher demand for gas in winter than in summer,” said Mark Myers, director of Alaska’s Division of Oil and Gas. “This lease will enable Unocal to inject surplus production into the storage formation during the summer, and then withdraw it at a fairly quick rate to meet the peak demands in the winter.” First state gas storage lease This is the first gas storage lease that the state of Alaska has ever approved — a gas storage facility that Unocal has operated for several years in the Swanson River field is in federal land.
“This demonstrates the state’s willingness to find creative solutions to the challenges of keeping Southcentral Alaska’s residential and industrial customers supplied with a reliable year-round source of energy,” said DNR Commissioner Tom Irwin. “I’m proud of the Division of Oil and Gas for working so quickly with Unocal to approve an innovative approach to this challenge.” Irwin: meets task force recommendation Irwin said that approval of the Pretty Creek lease fulfilled one of the recommendations of Gov. Frank Murkowski’s Agrium Task Force. The task force was appointed to help provide Agrium’s Nikiski fertilizer plant with enough gas to continue operations, according to DNR. An obligation under state regulations and contracts for Unocal to give public utilities first rights to gas places industrial customers such as Agrium under threat of reduced gas supplies, DNR said.
“By establishing the capability to store natural gas in the Cook Inlet basin, the Department of Natural Resources has taken an important step forward in addressing Southcentral Alaska’s need for a reliable source of energy,” said Gov. Murkowski. “I commend everyone involved, both in the department and at Unocal, for making this progress possible.”
A Unocal official said that the company would begin injecting gas into Pretty Creek as soon as Oct. 7. The state will collect royalties on 10 percent of the gas drawn from the Pretty Creek reservoir in recognition of the fact that there is still some gas that has never been produced from the reservoir.
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