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Ninilchik gas field flowing at 15 million cubic feet a day
Kristen Nelson Petroleum News editor-in-chief
Marathon Oil and Unocal said production has begun at 15 million cubic feet a day of natural gas from the companies' Ninilchik unit on the Kenai Peninsula in Southcentral Alaska. This is an area with gas discoveries dating from the 1960s, but pipeline infrastructure was only completed this year.
Marathon spokesman Paul Weeditz told Petroleum News Sept. 2 that the companies were testing and beginning the process of startup (see Sept. 7 issue, page 5) and the companies announced official startup Sept. 10, and said gas is moving through the recently completed Kenai Kachemak Pipeline. The line connects the Ninilchik gas field to existing natural gas pipeline infrastructure serving residential, utility and industrial markets on the Kenai Peninsula, Anchorage and in other parts of Southcentral Alaska.
Recent natural gas discoveries at Ninilchik, on the Kenai Peninsula some 35 miles south of Kenai, were announced in January 2002 and current production is from two wells at the Grassim Oskolkoff pad, the companies said, with two additional wells at a second production location expected to come online in October.
Weeditz said the next pad to come online would be Falls Creek.
First discoveries in early 1960s The Alaska Department of Natural Resources, Division of Oil and Gas, described the history of natural gas discoveries at Ninilchik when it approved three participating areas: Grassim Oskolkoff, Falls Creek and Susan Dionne.
Fourteen exploration wells have been drilled on the Ninilchik anticline, �recognized as a highly potential exploration target in the late 1950s,� the state said.
Falls Creek, formerly a separate unit surrounded by the Ninilchik unit, is an old gas discovery. Standard Oil Company of California discovered gas in the Tyonek formation at the Falls Creek Unit No. 1 well in 1960-61. Several intervals were tested, and the well was shut in. Marathon re-drilled and tested the well in 2001.
Unocal drilled the Ninilchik No. 1 well in 1962 and also tested gas.
Recent Ninilchik work has been spearheaded by Marathon, which began drilling in the area in 1996 at the Corea Creek No. 1. In 2001 and 2002, Marathon drilled two Grassim Oskolkoff wells, the Falls Creek redrill, and two Susan Dionne wells.
40 million cubic feet a day by year end By the end of the year, the companies expect production from Ninilchik to approach 40 million cubic feet a day.
Marathon, the Ninilchik unit operator, has a 60 percent working interest, and Unocal has 40 percent.
�The successful development of the Ninilchik discovery is an important element of Marathon's ongoing Cook Inlet natural gas business,� said John Barnes, Marathon's Alaska asset team leader. �We are also very pleased to announce the startup of the Kenai Kachemak Pipeline that will safely and efficiently transport Ninilchik gas to help meet the region's ongoing energy needs.�
Construction of the 32-mile, 12-inch diameter Kenai Kachemak Pipeline began in January 2003, following an open season in which Marathon and Unocal committed to transport gas for a 15-year period and agency approvals were provided for the construction permits. Marathon holds a 60 percent interest in Kenai Kachemak Pipeline LLC, the company formed to build and operate the pipeline. The remaining 40 percent interest is held by GUT LLC, a Unocal subsidiary.
�The start-up of the Ninilchik unit and the Kenai Kachemak Pipeline is a major milestone in Unocal's efforts to commercialize its south Kenai gas position,� said Charles Pierce, vice president, Unocal Alaska. �We are making significant investments to grow this business to help meet the increasing need for new sources of natural gas in Southcentral Alaska.�
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