Stepped-up drilling needed to keep gas flowing in Cook Inlet

Posted: Monday, March 22, 2010

An oil and gas consulting firm working with Southcentral Alaska utilities estimates that investments of $1.9 billion to $2.8 billion will be needed to drill enough wells to keep sufficient natural gas flowing from gas fields in the Cook Inlet region to supply current utility demand for space heating and electrical generation.

The figure is two to three times the amount spent in drilling by Cook Inlet producing companies between 2001 and 2009 to find about the same quantity of gas, according to a study by Petrotechnical Resources of Alaska.

The company is working under contract to Enstar Natural Gas Co., the regional gas utility, and Chugach Electric Association and Municipal Light and Power, two electric utilities serving Southcentral.

About 14 to 15 new wells per year will be needed, about a third more drilling than has been done in recent years, said Petrotechnical managing partner Tom Walsh at a Resources Development Council luncheon March 19 in Anchorage.

If the drilling isn't done, annual production in the region will fall short of annual demand by the utilities in 2014 and gas will have to be imported from elsewhere, most likely as imported liquefied natural gas, Walsh said.

-- Alaska Joournal of Commerce



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