Unocal, Marathon propose natural gas line for Kenai Peninsula

Posted: Thursday, December 13, 2001

ANCHORAGE (AP) -- Unocal and Marathon oil companies say they plan to begin soon to apply for a permits to build a natural gas pipeline to bring gas to the lower Kenai Peninsula.

The companies Wednesday announced the completion of a yearlong study that concluded the gas line is feasible. The two companies have formed a joint venture, Kenai Kachemak Pipeline LLC, to build and operate it.

Natural gas retailer Enstar and Homer Electric Association, the Kenai Peninsula's chief electric cooperative, also participated in the study.

The oil companies still must determine that there is a marketable supply of natural gas reserves before the project gets a final go-ahead, said Unocal spokeswoman Roxanne Sinz. Exploratory drilling is ongoing. The ultimate route and capacity of the pipeline also depends on exploration.

The proposed line would link the Kenai-Soldotna area with Anchor Point and Homer, promising cheap heating fuel to the southern Kenai Peninsula in the short term, and the prospect of shipping gas from reserves near Anchor Point northward in the long run.

The first phase of the pipeline, between Kenai and Ninilchik, may be operational by 2004, said Roxanne Sinz, Unocal's spokeswoman. The line is expected eventually to snake down to Anchor Point, with a feeder line to be built from Anchor Point to Homer.

The project's goal is to bring natural gas to market in the lower Kenai Peninsula within about three years, possibly sooner, she said.

Unocal sees the line as a big economic boost, sparking new jobs during construction, and creating indirect benefits to restaurants and suppliers.

''And, hopefully, lower energy costs for the end users. We see this as a big plus for everybody,'' Sinz said.

The line will likely follow the Sterling Highway corridor, the companies said.

A large part of Marathon's capital spending next year in Alaska will be aimed at boosting natural gas production, said John Barnes, manager of Marathon's Alaska business unit.

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