Marathon, Unocal begin gas production from Cook Inlet's Ninilchik unit

By OGJ editors

HOUSTON, Sept. 12 -- Marathon Oil Co. and Unocal Corp. have begun natural gas production from the Ninilchik discovery in Cook Inlet on the Kenai Peninsula 35 miles south of Kenai, Alas.

The unit is producing 15 MMcfd of gas, which is being transported through the newly commissioned 32 mile, 12-in. Kenai Kachemak pipeline (KKPL) connecting Ninilchik to an existing natural gas pipeline. It delivers gas to the Kenai Peninsula, Anchorage, and other residential, utility, and industrial markets in south-central Alaska.

The Ninilchik discovery, announced in January 2002 (OGJ Online, Jan. 23, 2002), currently is producing from two Grassim Oskolkoff wells. Operator Marathon expects an additional two wells to come online in October at a second production location, and by yearend, Ninilchik is expected be producing 40 MMcfd. Marathon estimates the structure contains 90 bcf of gas reserves.

Marathon holds a 60% working interest in the Ninilchik unit, and Unocal holds the remaining 40%. Marathon is a wholly owned subsidiary of Marathon Oil Corp.

Construction on KKPL began in January. Marathon holds a 60% interest in Kenai Kachemak Pipeline LLC, the company formed to build and operate KKPL, and Unocal subsidiary GUT LLC holds 40%.