AOGCC approves Ivan River storage

Commission’s order allows Chevron to inject up to 20 million cubic feet per day into a depleted zone at Ivan River

Eric Lidji

For Petroleum News

The Alaska Oil and Gas Conservation Commission is allowing Chevron-owned Union Oil Co. of California, or Unocal, to store excess natural gas supplies at the Cook Inlet basin Ivan River unit.

The decision allows Chevron to inject up to 20 million cubic feet per day into “a nearly depleted” sand on the west side of the Cook Inlet near the mouth of the Susitna River.

AOGCC is allowing Chevron to store gas in the Beluga 71-3 sand between a measured depth of 6,829 feet and 6,856 feet using the IRU 44-36 well. Chevron said it could decide to drill a new well or work-over an old well at the unit in the future.

Chevron plans to use the storage for its own needs, not for third party customers.

The Beluga 71-3 is an isolated zone at the unit, sandwiched between layers of siltstone and coal that “act as seals,” as Chevron phrased it in its application to AOGCC.

Ivan River produces from the Lower Sterling, Beluga and Tyonek formations, from shallowest to deepest. Unocal drilled IRU 44-36 in March 1993, penetrating two Sterling sands, as well as the Beluga 71-3, reaching peak gas production of 10.7 million cubic feet per day in September 1993. The well does not penetrate the Tyonek formation.

A water breakthrough occurred in January 1995, though, and production ended in September 1995 after Unocal tried unsuccessfully to plug the water chemically.

Unocal worked over the well in September 2001, re-perforating the original sands and drilling into deeper Beluga sands, but water, sand and coal prevented production from the deeper zones. Production peaked at 6.6 million cubic feet per day in January 2002.

The Beluga 71-3 sand produced gas until March 2004, but attempts to produce from shallower zones repeatedly failed.

Through June 2005, IRU 44-36 produced 3.1 billion cubic feet from the Beluga 71-3 sand, or 79.5 percent of the original gas in place. IRU 44-36 is the only well in the unit that produces from the Beluga 71-3 sand.

Chevron initially proposed its Ivan River storage venture in early 2010, but withdrew that application several months later without a public explanation.

That October, Chevron announced plans to market its Cook Inlet assets.

The company submitted a new Ivan River application earlier this year that proposed using the same well bore to inject the same volumes into the same gas sand at the unit.

Additional storage in the Cook Inlet basin is seen as one of the best ways of improving deliverability and extending well life by smoothing the huge seasonal demand swing in the region.