Providing coverage of Alaska and northern Canada's oil and gas industry
May 2022

Vol. 27, No.20 Week of May 15, 2022

CINGSA asks amendment of injection order

Alaska Oil and Gas Conservation Commission required gas detection at Inlet Fish Producers Cannery Loop plant when storage approved

Kristen Nelson

Petroleum News

In 2010, when Cook Inlet Natural Gas Storage Alaska, CINGSA, requested a storage injection order for the facility from the Alaska Oil and Gas Conservation Commission, Inlet Fish, then owned by Vincent Goddard, opposed issuance of the order.

As related in a Feb. 22, 2022, letter to the commission, Moira Smith, vice president and general counsel for CINGSA, Goddard told the commission he was concerned about potential gas leakage from a well drilled by Unocal in 1964, KU 13-08, which, he said, was located somewhere on his property and needed to be re-entered, capped and sealed.

Smith said that in 2010 “CINGSA provided Inlet Fish with certain documents that demonstrated that KU 13-08 had been capped and properly plugged and abandoned in 1964, shortly after its completion; that the hole had been ‘dry’ at the time of completion, making it unlikely that the pocket into which it was completed would come in subsequent communication with natural gas; and that there was no evidence to support the assertion that the KU 13-08 wellbore would become an avenue for the communication of natural gas in the future.”

At a hearing held in 2010 Goddard testified, Smith told the commission, that Inlet Fish’s primary concern was for the health and safety of its plant operations and staff.

When the commission issued the storage injection order, rule 3 directed CINGSA to “install, operate and maintain a gas detection and alarm system in all buildings located within 50 feet of the surface location of well KU 13-08, unless prohibited from doing so by either the owner or lessee of the land upon which KU 13-08 is located.”

CINGSA is requesting that the commission exercise its discretion to administratively waive compliance with rule 3.

Gas monitoring equipment

Smith said CINGSA installed gas monitoring equipment in the summer of 2012, as required in the order, and since then, “has worked diligently and in good faith to comply with the mandate in Rule 3 that it maintain gas detection equipment at Inlet Fish’s plant.”

The equipment has never alarmed due to gas detection, Smith said, but “has alarmed numerous times over the years - most frequently, when Inlet Fish employees disconnect power to the building which houses the equipment.”

The equipment cannot operate without power, tripping an alarm when power is lost, requiring CINGSA to respond.

Smith said both CINGSA and AOGCC have directed Inlet Fish to maintain power to the gas detection equipment, but winterization procedures at the plant “apparently consist of shutting off power to the buildings, including the gas detection equipment, at the end of each fishing season.”

Smith said while CINGSA responds immediately, it takes time for Inlet Fish to grant access to its facility. CINGSA employees responding to alarms at the plant “often report that Inlet Fish employees can be found inside the buildings, ignoring the alarming device and unaware of its purpose,” indicating, Smith said, that the company and its employees do not have an ongoing concern for natural gas safety at the plant.

Most recently, in January of this year, CINGSA attempted to coordinate with Inlet Fish’s local contact to make repairs to the equipment, and when access was gained, CINGSA found “the doors were knocked off the hinges, the walkways were not maintained, and that there was limited ingress and egress in the event of emergencies.”

CINGSA has suggested an alternate method to ensure there is no gas seepage - surveying the area around the well twice a year, which, Smith said, is consistent with industry maintenance practices and is how CINGSA operates on its property.

The company contacted Inlet Fish with this proposal and discovered it “had been sold once again - this time, to E&E Foods.”

“Based on its actions and communications with CINGSA, it appears Inlet Fish’s concerns about its proximity to CINGSA’s operations and the plugged and abandoned well on its property have been alleviated,” Smith said.

The commission has tentatively scheduled a hearing for June 14. It said requests for the tentatively scheduled hearing to be held need to be received, in writing, by 4:30 p.m. May 25.

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