Unocal applies for gas storage leases

Project at Pretty Creek would involve first state storage leases; company already storing gas on federal acreage on Kenai Peninsula

Kristen Nelson

Petroleum News Editor-in-Chief

Cook Inlet gas producers have said for some time that the inlet needs gas storage to balance demands for natural gas between summer and winter months. Unocal has storage on the Kenai Peninsula and is now proposing to add storage on the west side.

The Alaska Department of Natural Resources is taking public comment on an application from Unocal for gas storage leases at Pretty Creek on the west side of Cook Inlet. Unocal’s gas storage at the Kenai gas field on the Kenai Peninsula is on federal leases.

The Pretty Creek application is the first the state has received for storage leases, and would cover some 2,060 acres within the existing Pretty Creek unit. Pretty Creek is northeast of the Beluga River field.

The company plans to convert the Pretty Creek Unit No. 4 well to gas storage in two gas sand horizons, the Beluga 51-5 and the Sterling 45-0. The company said it might drill or re-drill additional wells to these sands in the future “to increase deliverability from the storage facility.”

Unocal said the Sterling 45-0 sand is watered out in the PCU No. 4 well and the Beluga 51-5 sand is nearly depleted. Storage would begin in the Beluga sand and then be expanded later to the Beluga sand. Operations would start with just the PCU No. 4 wells, but Unocal said it may later re-drill the PCU No. 2, or drill a new well, for storage operations.

“The storage gas will be injected during periods of excess supply and produced back during periods of increased demand to help balance gas deliverability requirements,” the company said. Excess gas is available in the summer months; winter heating requirements cause a higher demand.

The PCU No. 4 well was drilled and completed in November 2001. Unocal said the Beluga 51-5 sand “is not yet fully depleted” but the company wants to convert the well to gas storage “at this time in order to avoid production-related problems that often occur at the late stages of reservoir depletion.”

The Pretty Creek storage facility would be used for “injection of excess gas owned by Unocal.” The company said it is “likely that the physical molecules of gas may be sourced from the Beluga River field or from other West Side properties operated by others.” Unocal-owned and operated gas would probably come from the Grayling gas sands on the Steelhead platform in the McArthur River field. Unocal said the Grayling gas from the Steelhead has a composition similar to Beluga River gas, and all expected sources of gas are primarily methane “and are very similar to the original gas in the reservoir (so) no fluid compatibility problems are expected.”

Daily maximum injection is expected to be 20 million cubic feet. Unocal said no wells penetrate the Beluga 51-5 and Sterling 45-0 sands within a quarter mile of the PCU No. 4 well.

Comments on consistency with the Alaska Coastal Management Program are due July 25, as are comments regarding whether the proposed lease would be in the best interests of the state.

A proposed consistency determination is expected Aug. 8; a final consistency determination and written finding Aug. 15; and awarding of the lease Sept. 9.