A Texas-based company focused on developing oil resources in the Cook Inlet on Thursday announced plans to partner with California-based WesPac Midstream LLC., to develop natural gas resources in the Cosmopolitan oil and gas prospect near Anchor Point.
BlueCrest Energy Inc., President J. Benjamin Johnson told a crowd of about 100 at the Kenai Peninsula Economic Development District’s annual outlook forum that the partnership would allow the company to develop the gas resources faster than it would have done on its own.
“BlueCrest’s focus initially has been oil. We need to get that well producing, we’re doing that from shore and that is our main concern,” Johnson said. “However, we also know that getting gas developed takes a long time and Cook Inlet is going to need gas within a few years.”
BlueCrest Energy’s plan is to install two gas production plaforms, the first in 2017 and a second in 2017.
This spring BlueCrest hopes to begin drilling from onshore, with a land-based drilling rig, into the deeper oil reservoir at Cosmopolitan and also begin drilling wells from a jack-up rig into the shallower natural gas deposit, Johnson said in an interview.
The company hopes to use the Spartan 151 jack-up rig now under contract to Furie Operating and in winter storage at Port Graham. Furie has been using the rig to explore its Kitchen Lights gas discovery in upper Cook Inlet. Johnson said the estimated gas reserves at Cosmopolitan are confidential, “but they are substantial.”
However, an indication of the resource is that the two production platforms that are planned by BlueCrest would have a capacity to produce 35 million cubic feet of gas per day or 70 million cubic feet per day combined, he said.
WesPac builds and operates fuel terminals and is developing Liquefied Natural Gas (LNG) facilities in several parts of the nation, and plans to build a small or mid-sized LNG facility at Port MacKenzie on upper Cook Inlet to take gas and distribute LNG to Alaskan communities, for fuel.
“They’re going to put it (LNG) in small containers, in barges, on rail cars, in trucks and basically provide a cheap alternative to diesel fuel that most of the communities need,” Johnson said.
Johnson said BlueCrest was approached by WesPac to develop its gas reserves.
“What we’re planning to do is design these facilities where the shallow part is (with) WesPac and the deeper part, where the oil lies, is with BlueCrest,” Johnson said. “WesPac would get 100 percent ownership of the gas sands, while BlueCrest will continue to operate them, he said. Then, at some point, after they’ve reached the minimum terms and get their money back, BlueCrest will; come back in and begin owning the gas.”
The agreement between the two companies is contingent upon a sales arrangement of LNG and sales of the gas itself.
Alaska Journal of Commerce reporter Tim Bradner contributed to this article. Reach Rashah McChesney at firstname.lastname@example.org