Gas storage lease PODs OK’d by division

At Hilcorp’s Kenai gas pool 6 and Pretty Creek gas storage leases, cumulative injection is 72.1 bcf of gas, withdrawal 51.2 bcf

Kristen Nelson

Petroleum News

Director Tom Stokes of the Alaska Department of Natural Resources’ Division of Oil and Gas has approved plans of development for two gas storage leases in Cook Inlet: Hilcorp Alaska’s Kenai gas field Pool 6 gas storage lease and Hilcorp’s Pretty Creek gas storage lease.

The Pretty Creek POD, approved in late April, is for the smaller of the two storage leases.

The gas storage lease at Pretty Creek, onshore on the west side of Cook Inlet, was granted to Union Oil Company of California in 2005; Hilcorp took over as operator in 2012. Stokes said that in 2015 the division approved Hilcorp’s request to extend the lease for one additional term of 10 years, ending Sept. 30, 2025.

The Pretty Creek gas storage lease is some 1,999 acres and uses two horizons for storage, the Sterling 45-0 gas sands and the Beluga 51-5 gas sands, Stokes said in the division’s approval letter; Hilcorp uses the Pretty Creek unit No. 4 for gas storage operations.

During the 2020 calendar year the company injected 320.65 million cubic feet and withdrew 613.99 mmcf, compared to injecting 41.91 mcf and withdrawing 177.39 mmcf in the 2019 calendar year.

In its application Hilcorp said estimated total current gas in place within the storage reservoir at Pretty Creek is 1,745 mmcf and with current compression capabilities the working volume in the 51-5 storage reservoir is 1,387 mmcf.

“In order to maximize recovery from the 51-5 Pretty Creek storage reservoir during the final ‘blowdown’, a secondary compressor will likely be installed at the Pretty Creek pad,” the company said, allowing for production down to lower pressures at surface.

The division approval said allowing the reservoir to depleted to a lower pressure would maximize recovery.

Hilcorp said it has not yet determined when the secondary compressor would be installed. “The timing will be contingent on the results of native gas production projects in PC-2 and/or any future drill wells.”

The division’s approval of the 17th POD for the storage lease is for June 1 through May 31, 2022.

Kenai Pool 6 is in the Kenai unit on the east side of Cook Inlet. It was formed in 2006 with Marathon Oil Co. as operator; Hilcorp took over as operator in 2013. In 2016 the division approved a request from Hilcorp to extend the lease for an additional 10-year term, expiring in 2026, Stokes said in the current approval letter. There are some 2,638 acres in Pool 6 and as of April 30, 65.444 billion cubic feet of gas had cumulatively been injected into the pool and 45.031 bcf withdrawn.

In the 16th POD Hilcorp planned to look for opportunities to increase Pool 6 gas distribution and replenishment, including bailing sand from the KU 31-07X well, Stokes said, and there was also the potential that the company would drill a new Kenai Pool 6 well and add perforations to the KU 13-06 well to increase deliverability for that week.

The division approval letter said Hilcorp reported drilling a new Kenai Pool 6 producer, the KU 44-01B, brought online in January producing from the Sterling sands.

For the 2020 calendar year, Stokes said, Hilcorp injected 1.916 bcf of gas and withdrew 7.347 bcf from Kenai Pool 6.

In the 17th POD the company proposed recompleting the KDU-01 to the Kenai Pool 6 storage reservoir and recompleting the KU 31-07X from the storage reservoir to other native gas sands in the Kenai unit, with recompletion of KU 31-07X dependent on success of the recompletion of KDU-01.

KDU-01 is shut-in and last produced from the Tyonek sands in 2018; KU 31-07X is a shut-in Kenai Pool 6 injector and producer.

The division approval letter said it was the intention that the two wells, KDU-01 and KU 31-07X, would “essentially swap functions, thereby improving the deliverability of the Kenai Pool 6 through the recompletion of KDU-01 while increasing native gas production in the KU through the recompletion of KU 31-07X.”

The approved plan is effective Aug. 1 through July 31, 2022.

In its application Hilcorp said maximum storage capacity at Pool 6 is estimated at 40.94 bcf, with total estimated working capacity of 34.98 bcf.

The company estimated that total gas in place as of the end of 2020 was 18.27 bcf, with working gas in storage estimated at 12.3 bcf.

The new producer, 44-01B, was “necessary to optimize storage operations,” Hilcorp said.

There are no long-range plans at Pool 6, the company said, but it is reviewing recompletion of KDU-01 to the Pool 6 gas storge reservoir, and if that is successful, 31-07X will be recompleted, “isolating the Pool 6 storage sand and moving to separate native gas sands.”

“KDU-01 currently sits in a favorable location for high productivity from Pool 6, while 31-07X has been exhibiting declines in deliverability, potentially due to fines migration,” the company said.