Natural gas work continues on Kenai Peninsula

Marathon applies to drill at southern end of Ninilchik unit, Unocal will drill up to nine Happy Valley wells

Kristen Nelson

Petroleum News Editor-in-Chief

Natural gas exploration is continuing on Alaska’s Kenai Peninsula, with both Marathon Oil Co. and Unocal applying for work which will expand areas of known gas accumulations.

Marathon has applied to drill exploration wells from a new pad at the southern end of the Ninilchik unit to test the Paxton exploration play. Ninilchik unit operator Marathon and its partner Unocal have been delivering natural gas from drilling pads in the northern portion of the unit since this fall. The company told the state in early December that if exploration is successful, it “will seek the necessary approvals and permits to install a lateral pipeline that will supply gas to the existing Kenai Kachemak Pipeline.”

The Paxton pad will be used to test the southern portion of the structure at the Ninilchik unit, Marathon said, because the southern portion of the unit “cannot be reached from the Dionne Pad located approximately 1.8 miles northeast of this location.”

The Paxton pad, on private land, is some three miles north of Ninilchik and is accessed from the Sterling Highway.

Marathon said it plans to drill, using Nabors Drilling Rig No. 129, on or before Feb. 23 and complete operations in early April.

“Paxton Pad will be constructed to allow the drilling of two to three exploration wells and will be approximately 200 by 300 feet,” the company said. Water for drilling will be from a new water well to be drilled on the pad.

Marathon said the well, which will be drilled to a bottom hole on state oil and gas lease ADL 384372 from the pad on private land, is “to confirm the presence of recoverable gas reserves in the southern portion of the Ninilchik Unit.”

Unocal working at Happy Valley

Unocal told the state of Alaska in mid-December that it plans up to four wells at the Happy Valley pad “to delineate the Happy Valley gas field.” The pad is on private property owned by the Ninilchik Native Association, but proposed bottom holes for the wells are on state oil and gas lease ADL 0384380 or Cook Inlet Region Inc. lease C-061590.

“Depending on the results of the delineation,” Unocal told the state, “an additional five wells may be drilled across 2005 and 2006.” Production activities will begin once the field has been delineated.

Unocal said its “goal is to have four to five wells online and flowing through a production facility by Nov. 1, 2004.”

The pad is some six miles east of the Sterling Highway and is accessible by Oil Well Road with a short gravel road extension to the pad. Unocal said the Kenai Kachemak Pipeline (which it owns in partnership with Marathon) will extend the pipeline along Oil Well Road to the drill site.

Unocal said it plans an unmanned operation at Happy Valley, with operational support from the manned field office in Ninilchik approximately nine miles away with inspections of the drill site at Happy Valley at least twice a day.

The planned schedule is for three wells to be drilled between January and March, with testing from February to April. Facilities will be installed from June to October, with commissioning and startup in October and first gas planned for Nov. 1, 2004.