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Marathon looks to lease borough land

Clam Gulch parcel would house infrastructure for adjacent drilling

Posted: Tuesday, February 06, 2007

Marathon Oil Company wants to lease an acre of borough land adjoining its GO Pad near Clam Gulch where it is currently drilling the fifth gas well at that location.

GO Pad sits on land leased by the company from a private owner, but an acre of the Kenai Peninsula Borough’s adjacent 40-acre piece would do nicely for housing a new compressor and a valve station. According to the borough, Marathon engineers said it would provide for a superior design at a lower cost than other expansion alternatives.

Marathon spokesman Keith Wiles said the borough tract would allow for a more compact footprint while also gaining certain benefits in safety and reliability.

“In addition,” he said, “the KPB site is superior from a noise mitigation and sight mitigation standpoint, meaning less impact on neighbors.”

Wiles said drilling operations for the GO number 5 well should be completed later this month, and that while the well is tapping an area of proven reserves, the hydrocarbons it hits are likely to be unique to that well — that is, what GO 5 hits will probably not have been drilled by other wells.

Two other wells also are planned elsewhere in the Ninilchik Unit, of which the GO Pad is a part, Wiles said. One will be drilled at the Ninilchik State Pad a few miles south of the GO Pad. The location of the other is still to be determined, Wiles said.

The company and the borough have negotiated a 30-year lease for the single acre. Rent would begin at $2,500 a year, and increase by 3 percent per year, ending in year 30 at $5,891.41.

Hal Spence can be reached at harold.spence@peninsulaclarion.com.



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