Easement sought for Cook Inlet gas line

Wesley Loy

For Petroleum News

Cook Inlet Energy LLC is seeking a pipeline easement for its Otter natural gas prospect on the inlet’s west side.

An Alaska Department of Natural Resources public notice about the easement application was published Aug. 10.

The application builds on some positive talk recently about Otter, where Cook Inlet Energy recently drilled an exploratory well.

The company is a subsidiary of Tennessee-based, publicly traded Miller Energy Resources Inc.

David Hall, Cook Inlet Energy’s chief executive, said during Miller’s July 25 investor conference call he had high hopes Otter will become “a very prolific gas field.”

The Otter prospect is about 10 miles north of the Beluga River gas field, long a major energy source for Anchorage, the state’s largest city.

Cook Inlet Energy recently drilled the Otter No. 1 well to a depth of 5,680 feet.

During the conference call, Hall said the well found “two significant hydrocarbon gas shows in the zone of interest.” He said the company planned to conduct a chemical treatment, a hydraulic fracture or both to stimulate the well.

In its application to DNR, Cook Inlet Energy said the easement would be for a buried gas pipeline, 6 inches in diameter, to run alongside an existing road. The proposed easement would be 24,500 feet long and 30 feet wide, the public notice said.

A map shows the easement beginning at an existing gas line and running northwest along the south side of the Theodore River.

In an Aug. 15 interview, Hall told Petroleum News the easement application doesn’t necessarily signify a commercial discovery at Otter.

“We’re still wrapping our heads around what we have,” he said.

The company intends to take its time and conduct a thorough analysis of the well results and the geology before making any definitive announcements, Hall said. He noted it’s a new field, never before drilled.

That said, the company feels quite positive about Otter, he said, and applying for the pipeline easement is just part of the planning process.

The nearby ConocoPhillips-operated Beluga River field has been an important gas producer for many years. Chugach Electric Association operates a gas-fired power plant there.

Cook Inlet gas has been a hot topic in recent years, as known reserves are depleting and deliverability has become strained during winter when demand peaks.

As a result, drill bits have been turning to find new gas supplies.

Cook Inlet Energy used a company-owned rig to drill the Otter No. 1 well. A Miller Energy executive said the well cost about $7 million.