Vision gets good DNR review to operate, own North Fork Pipeline

Kay Cashman

Petroleum News

On Oct. 13, Glacier Oil and Gas received conditional approval from the Alaska Department of Resources’ Division of Oil and Gas, State Pipeline Coordinator’s Section, to transfer its interest in the North Fork Pipeline right-of-way lease, ADL 230928, to Gardes Holdings company, Vision Resources.

Vision was previously approved by the division to assume ownership and operatorship of the southern Kenai Peninsula North Fork unit. Once Regulatory Commission of Alaska approval has been issued Vision will officially operate the pipeline.

Gardes received an analysis of the transfer of interest that carried conditions the company must sign off on before approval is final, but Mark Landt, who runs Vision, told Petroleum News Oct. 19 that the company will accept the terms.

“It was what we expected, and fair,” he said. “There were no obligations that we did not expect.”

The North Fork Pipeline was built in the winter of 2011 and consists of dual pipelines and their related facilities. It is unique among pipelines in Alaska in that the majority of it is a glass-fiber reinforced epoxy pipe instead of the standard steel pipe.

SPCS reviewed the pipeline’s case file for a history of lease compliance, including technical obligations, such as spill reports. No outstanding concerns were found, SPCS said.

As part of its review, SPCS also conducted an aerial and ground surveillance of the pipeline in May.

“Despite heavy public use of the ROW as a transportation corridor for all-terrain vehicles and snow machines, the ROW has been maintained well,” SPCS said.

Based on its review, SPCS said it found no outstanding lease compliance or technical issues with the pipeline and that “Gardes, through Vision, is technically capable of operating, maintaining, and terminating the North Fork Pipeline.”

The division’s Commercial Section conducted a thorough review of Gardes’ financial documents using a five-criteria assessment method for evaluating a lessee’s ability to carry out present and future obligations in the oil and gas sector.

DNR found that “Gardes should have sufficient financial capability to meet the obligations of the ROW lease.”

DNR required several mitigation measures be enacted before the acknowledgement of transfer of interest is issued, such as additional insurance policies, guarantees, and revised bonding.

- KAY CASHMAN