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Kenai Kachemak Pipeline files initial tariff Company says natural gas shipments to begin Aug. 20 Kristen Nelson Petroleum News Editor-in-Chief
Kenai Kachemak Pipeline has told the Regulatory Commission of Alaska that it expects to begin natural gas shipments Aug. 20 and has filed an initial tariff for intrastate natural gas shipments, with rates for both firm and interruptible transportation.
The pipeline will transport gas from the Ninilchik unit discovery, announced last year by Marathon Oil and Unocal Alaska, and will interconnect with existing pipelines in the Kenai field area. From there gas will move to markets on the Kenai Peninsula and in the Anchorage area.
Last August the Kenai Kachemak Pipeline said it had secured two long-term capacity commitments and finalized the design of a 33-mile-long, 12-inch diameter natural gas pipeline. The pipeline is designed to transport as much as 120 million cubic feet of natural gas per day and is projected to cost $25 million to design and construct.
Kenai Kachemak Pipeline is jointly owned by Marathon (60 percent) and GUT LLC, a wholly owned subsidiary of Unocal (40 percent), with ownership interests in direct proportion to the gas shipment commitments made by Marathon and GUT LLC’s producer affiliate, Unocal Alaska.
The companies committed to ship through the line for 15 years. Work began in January Clearing for the pipeline began in January and the Joint Pipeline Office said June 4 that with the exception of pipe associated with horizontal directional drilling, the entire pipeline is now buried.
Crews were cleaning and dressing up the right of way in areas where pipe installation was complete, the JPO said, and milepost signs were being placed at one-mile intervals along the right of way.
A legal wrinkle was ironed out in mid-May with the passage by the Alaska Legislature of Senate Bill 151, which clarifies that the Regulatory Commission of Alaska has the authority to authorize "firm" and "interruptible" services for other Alaska gas transmission pipelines — not just a North Slope gas pipeline.
The Legislature authorized "firm" and "interruptible" service on a North Slope gas pipeline in 2000, when that was the only pipeline proposing to offer such service. When the Kenai Kachemak Pipeline asked the RCA to authorize it to offer firm and interruptible services, the RCA declined, noting that the 2000 amendment dealt only with transportation of gas from the North Slope.
Senate Bill 151 deletes references to the North Slope, making "firm" and "interruptible" options available statewide.
Shippers with interruptible service, Kenai Kachemak Pipeline said in its proposed tariff, are subject to curtailment or interruption at any time their interruptible deliveries would interfere with deliveries of gas under firm service. The pipeline also noted that it "is not obligated to add any facilities or expand the capacity of its pipeline system in any manner in order to provide interruptible transportation service." Parties seeking a pipeline connection must bear the costs associated with construction of connecting facilities.
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