KENAI (AP) -- A natural gas well proposed near Anchor Point could provide cheaper energy for southern Kenai Peninsula homes and businesses, as well as adding to the supply of gas for communities further north.
Northstar Energy Group Inc. proposes drilling a second well to tap the North Fork gas field near Nikolaevsk.
The first well, drilled in 1965 by Standard Oil of California, found commercial quantities of gas, said Keith Summar, Northstar vice president for exploration. However, the south peninsula market was considered too small to justify developing the field.
Northstar is betting that a pipeline soon will be built to carry south peninsula gas to larger markets to the north.
''We feel it's just a matter of time until that pipeline is built, because the Anchorage bowl is growing, while the historical gas supply is shrinking,'' he said. ''You have to go somewhere else for gas, and (the south peninsula) is the logical place to go. That's why we, Unocal and Phillips have picked up leases in the area.''
Enstar Natural Gas Co., Homer Electric Association and Unocal recently began a study to determine the feasibility of building a pipeline from Kenai to Homer. That would carry south peninsula gas to northern markets while supplying south peninsula homes and businesses.
''We're willing to take a little risk and drill, because once we prove those reserves, there will be demand to get the line in place,'' Summar said. ''The North Fork gas by itself will not be sufficient, but there are other operators that are going to be drilling wells.''
Northstar bought Gas Pro, operator for the North Fork field, a year ago to establish a position in Alaska, he said. Phillips Oil Co. and Marathon Oil Co. are partners in the field.
Tests of the original North Fork well in 1966 produced a flow of 4.4 million cubic feet of natural gas per day, he said. The state puts the field's proved reserves at 12 billion cubic feet, but Northstar believes there is more gas than that, according to Summar.
Northstar holds additional leases just north of the North Fork lease and has more exploration plans in the works, he said. It also plans to participate in the state's Cook Inlet Areawide Oil and Gas Lease Sale in May.
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