Marathon Oil happy with natural gas tests on Peninsula

Posted: Friday, April 26, 2002

ANCHORAGE (AP) -- Marathon Oil Co. said it is encouraged by the results of tests at a new natural gas reservoir on the Kenai Peninsula.

Marathon and its partner Unocal Corp. hope to begin selling the gas in 2004.

The companies said in January that an exploration well 35 miles south of Kenai had produced up to 11.2 million cubic feet of gas per day. A second well can yield 11.9 million cubic feet of gas per day, which the company calls a good find. A third well can add 6.8 million cubic feet daily.

The announcement comes at a time when some analysts believe Southcentral Alaska may face gas shortages in the near future unless new supplies are found.

Last year Marathon and Unocal drilled the well in the 25,000-acre Ninilchik Exploration Unit. The companies say significant natural gas accumulations have been found in the tested zone of 8,048 to 9,822 feet underground.

Marathon, which owns 60 percent of the well, supplies about two-thirds of the gas consumed in Southcentral Alaska. Unocal holds the rest of the well.

Unocal produces oil and gas in Cook Inlet and on the Kenai. The company has said the Ninilchik Unit and other prospects in the southern Peninsula could contain reserves of 100 billion to 600 billion cubic feet of gas.

More exploration drilling is planned this year and next. Before production can begin, a 75-mile gas pipeline is needed to connect this new production area near Anchor Point to the Southcentral pipeline system at Kalifonsky.

Marathon and Unocal have begun designing and permitting the proposed line.

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