Hilcorp subleases Kenai airport hangar

Hilcorp will be using a hangar on the Kenai Municipal Airport for flights to its facilities on the west side of Cook Inlet.

The privately-owned Houston, Texas-based oil and gas producer is subleasing a city-owned airport property on North Willow Street from commercial real estate landlords Schilling Rentals.

Hilcorp — which became the largest producer in the Cook Inlet oil and gas industry after major producers Chevron and Marathon sold their interests in the region’s declining oil fields to it in 2011 and 2012, respectively — flies at least one plane, a DeHavilland DHC-6 Twin Otter, from the Kenai airport. According to the Kenai airport administration’s enplanement reports, Hilcorp flew 3,574 people from the Kenai airport in 2015 and 4,328 people in 2016.

Schilling Rentals owns and leases several commercial properties in Kenai, as well as holding leases on city-owned land that it subleases to other commercial operators. The airport hangar that Schilling Rentals is subleasing to Hilcorp is one of the latter.

Schilling Rentals previously subleased the hangar to ConocoPhillips, beginning in May 2014, a month after Schilling bought its lease from another company, Kenai Hangar. In October 2016, Hilcorp bought ConocoPhillips’ interest in the North Cook Inlet state lease unit, and ConocoPhillips requested that the hangar sublease be re-assigned to Hilcorp as well.

The Kenai city council unanimously approved the sublease between Schilling and Hilcorp at their meeting on Sept. 20. At the same meeting, they also approved Schilling’s acquisition of two other hangar leases from Kenai Aviation, a charter air taxi business that closed in July after 56 years of operating on the Kenai Airport.

Previously, Hilcorp had applied to lease two vacant city lots on the Kenai airport with plans to build a new hangar, but withdrew these plans before Kenai’s Planning and Zoning Commission was scheduled to discuss them on July 26.

Reach Ben Boettger at ben.boettger@peninsulaclarion.com.

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