Marathon Oil joins group planning Kenai Peninsula gas line

Posted: Sunday, September 02, 2001

KENAI (AP) -- Marathon Oil Co. has joined a consortium studying construction of a natural gas pipeline from the Kenai gas fields to Homer.

An agreement signed Aug. 21 makes Marathon an equal partner in the Kenai-Kachemak Pipeline Project, according to an announcement from Homer Electric Association. The other partners are Unocal; Alaska Electric Generation & Transmission, of which Homer Electric is the primary owner; and Alaska Pipeline Co., a subsidiary of Enstar Natural Gas Co.

Norm Story, Homer Electric's general manager, said Marathon has substantial potential gas reserves on the southern peninsula, and its involvement adds momentum to the project.

Marathon has applied to the state to form an exploration unit from Ninilchik to Clam Gulch, including adjacent areas of Cook Inlet.

John Barnes, Marathon's Alaska business unit production manager, said Marathon has been drilling for several years to develop existing fields and find new reserves.

The Kenai-Kachemak pipeline group was formed in December to study the feasibility of a pipeline to tap potential gas fields near Ninilchik.

The pipeline would carry gas from the southern Kenai Peninsula to markets further north, while extending natural gas service to the southern end of the peninsula. Ultimately, it could reach consumers as far south as Homer.

In July, the group finished its study evaluating costs, routes and permit issues. The next step would be seeking bids from engineering firms on design work.

Construction of the $45 million project could begin by fall 2002.

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