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Furie POD extension?
Chapter 11 proceedings stifle new development or exploration commitments at KLU Steve Sutherlin Petroleum News
Furie Operating Alaska LLC, in an Oct. 4 letter signed by counsel Jon Iversen of Stoel Rives LLP, has requested an extension of its existing plan of development for the Kitchen Lights unit, located offshore in upper Cook Inlet.
Furie, headquartered in Anchorage, was required to submit its seventh POD by Oct.7, however the company filed a voluntary petition for Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware Aug. 9, thus it has asked the state Division of Oil and Gas to allow the current POD to stay in place until its bankruptcy proceedings are resolved.
Furie’s existing POD will likely be extended as requested. This was the policy of the division when Aurora Gas LLC, which operated Nicolai Creek unit on the west side of Cook Inlet, was going through bankruptcy in 2016-17.
Operations and production from the company’s Julius R natural gas platform continue, but Furie is unable to commit to development expenditures such as drilling new wells until bankruptcy proceedings have cleared.
“Due to the current Chapter 11 proceedings that may result in new ownership of the company or the KLU assets, Furie cannot at this time reasonably or credibly commit to additional development or exploration activities that may change with changes in ownership,” Iversen said. “Accordingly, Furie hereby requests an extension such that current POD would stay in place pending resolution of the Chapter 11 proceedings.”
2019 activity In addition to the extension request, the three-page letter included a summary of Furie’s activities in 2019.
From January through April, Furie’s primary concern was resolving hydrate plugs that formed in its KLU gas pipeline, Iversen said.
In early January, Furie ran into problems when hydrate plugs at its onshore processing facility and in the 15-mile subsea pipeline from the offshore production platform slowed natural gas delivery to a trickle and put Furie’s contract with utility Enstar Natural Gas in jeopardy. Gas output fell from 739,023 thousand cubic feet to 1,886 mcf in February.
“Furie personnel, along with its contractors and industry experts, worked diligently to resolve this issue,” Iversen said. “Remedial measures included bleeding the pipeline pressure down at the onshore processing facility and offshore production platform to place the hydrate plugs in a pressure/temperature regime where the hydrate would dissociate, and Furie pumped large methanol pill treatments with heated produced gas.”
“After seeing diminishing returns from alternating injection between the production platform and the production facility, the decision was made to pump a large methanol pill followed by nitrogen from the production facilities toward the platform,” he said. “The rationale was that more pressure was needed to get the hydrate plug to move and Furie wanted to achieve this pressure with nitrogen to avoid creating additional hydrate plugs that could occur with higher produced gas pressures. The pressure was bled off at the platform and 15,000 gallons of methanol were pumped at the processing facility.”
“Communication between the platform and processing facility was established in late March when the hydrate plugs were resolved,” Iversen said, adding that current daily production is approximately 16 million cubic feet per day, and that Furie has seen no problems with the pipeline as a result of the hydrate plugs or remedial actions taken.
Taking measures Iversen said the company is taking measures to avoid encountering hydrate plugs, including a periodic pigging program to ensure the pipeline stays clear and a prescribed and constant low volume injection of methanol into the pipeline from the production platform; producing only from the Beluga formation to limit the amount of produced water entering the pipeline; preparing for a modification to route incoming production through a process heater to improve separation at the central processing facility; installing additional heat trace at the CPF to minimize the potential for freezing; installing a methanol injection point at the CPF pipeline inlet, installing a thermometer on the departing pipeline on the platform, with supervisory control and data acquisition monitoring; and installing a thermometer on the incoming pipeline at the CPF with SCADA monitoring.
The company has developed a water remediation plan to handle water produced from the Sterling formation in order to be able to produce from those zones in the future, and it anticipates submitting a permit in November to allow overboard discharge of produced Sterling formation water after onsite treatment, Iversen said.
Additional activities Aside from the activities to deal with hydrate plugs, the letter listed additional work done or underway at the KLU during 2019.
Furie procured two replacement gas-fired generators and an auxiliary diesel-fired generator for the platform and anticipates that they will be installed and commissioned by the end of October 2019.
Other 2019 activities have included perforating the Beluga formation in the A-I well, returning the A-2A well to production in the Beluga formation, planning a coil tubing workover of the A-4 well for late October 2019 to recover wireline fish and tubing plug to access the Beluga formation, performing a pipeline span survey and scheduling remediation work for October 2019, procuring a coalescing filter separator for improved dehydration performance with the installation scheduled for November 2019.
“Furie plans to continue its efforts to maintain and enhance production from the KLU including maintenance of infrastructure and wells as necessary, and upgrading equipment like the generators,” Iversen said. “Furie also will continue to work on progressing and implementing the water remediation plan mentioned above and on identifying and maturing prospects for exploration and development.”
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