Inlet needs better pipeline connections, jackup rig

Kristen Nelson

Petroleum News editor-in-chief

In addition to continued natural gas exploration, Mark Myers told the Alaska Natural Gas Development Authority July 28, Cook Inlet infrastructure needs some work.

Its pipelines need to be better connected.

“Right now we have little segments that are private, other segments that are public — it’s not acting like a hub right now.” The pipeline system needs “to connect up better” so that gas can be moved from one side of the inlet to the other when there are supply imbalances, said Myers, director of the Alaska Division of Oil and Gas.

The inlet also needs a jackup rig so that companies can explore offshore. Most Cook Inlet gas was found accidentally by companies looking for oil.

“There are a lot of areas offshore that have significant gas potential, but can’t be explored until they have a rig looking for oil,” Myers said.

Industry is interested in bringing in a rig, and if one more company signs on, there would be a jackup rig in the inlet for a couple of years. “That might find some significant quantities of gas,” he said.

The biggest sticking point in bringing a jackup rig to Cook Inlet is the cost to mobilize and demobilize it. The “Jones Act is what kills you: You can’t get a lift barge to take a rig out of Louisiana, they actually have to take it from a foreign location to get it over here.”

Because of the mobilization cost, “you need multiple companies, you need about two years of activity to justify the economics. And we’re very close to getting it.”