New gas platform for Cook Inlet now en route from Texas

  • By Tim Bradner
  • Sunday, June 15, 2014 9:21pm
  • News

The new Furie Operating Alaska platform planned for Cook Inlet is en route to from a Texas fabrication facility towed by a Crowley Maritime Corp. tug.

Meanwhile, pipe for subsea pipelines to connect the platform with onshore gas facilities is also being shipped, although Crowley is not handling that movement.

Craig Tornga, a Crowley vice president, said Crowley’s tug Ocean Wave, which is towing a barge loaded with the platform, has departed Ingleside, Texas, and is now headed to Cristobal, Panama, for a Panama Canal transit.

Furie Operating Alaska will install the platform in July and August for the company’s planned Kitchen Lights gas production project. Two 10-inch subsea pipelines will also be built.

Furie is a Houston-based privately-held oil and gas company that does not release its gas reserve estimates or potential production. However, the facilities being installed have the capability of handling 30 million cubic feet per day, according to plans filed by Furie with the Alaska Division of Oil and Gas.

The platform will be located about 20 miles northeast of Nikiski and about 15 miles southwest of the ConocoPhillips Tyonek platform, which serves that company’s North Cook Inlet gas field.

Furie drilled its first exploration well, KLU No. 1, at the site in 2011 using the Spartan Offshore Drilling Spartan 151 jack-up rig. The company drilled three other wells in 2012 and 2013 using the jack-up rig to confirm the discovery and test other prospects.

State officials said the company is obligated under its lease work commitments to drill two more exploration wells in the area.

Furie’s platform will be the first new offshore production facility installed in Cook Inlet since the mid-1980s when Forest Oil Corp. installed the Osprey oil production platform at the Redoubt Shoal field on the Inlet’s west side.

The company’s quest to drill and develop the Kitchen Lights prospect has had its ups and downs over several years. In exploring the prospects, Furie has also had to overcome challenges that have included skepticism by state agencies that the company would be able to pull off the project.

Escopeta Oil and Gas, Furie’s predecessor company, has worked for almost a decade to raise funds and move a jack-up rig to Cook Inlet to drill the Kitchen Lights prospect. The company had some bad breaks.

In 2006, the initial financing to move the rig from the U.S. Gulf coast to Alaska fell through. In 2010, when the financing was put back together, the federal government denied a renewal of an exemption to the U.S. Jones Act that would allow Escopeta to use a foreign heavy-lift ship to move the rig.

In a decision that smacked of politics, the federal government, by then headed by President Barak Obama, a Democrat, said there were no energy security issues in Cook Inlet that justified the Jones Act exemption, even though in 2010 a serious gas supply situation seemed to exist in Southcentral Alaska.

The Jones Act requires all voyages between American ports to be conducted by U.S.-built ships and manned by U.S. crews.

In contrast, in 2006, the administration of Republican President George W. Bush granted the Jones Act exemption to bring the rig on a foreign ship on the grounds of regional energy security and national defense. Former U.S. Sen. Ted Stevens had provided assistance.

Stevens was gone from the Senate by 2010, and the national administration had changed. In 2010 the Southcentral Alaska regional gas supply situation had actually worsened compared with 2006, as there had been no new drilling, but the Department of Homeland Security provided no explanation for its reasoning in changing its position on the waiver.

Danny Davis, Escopeta’s colorful president, continued to work that year with the federal agency to secure the renewal of the exemption. Faced with drilling deadlines on the Kitchen Lights leases, Davis decided to take a chance that the exemption would come through. He loaded the rig on a Chinese heavy-lift ship and sailed for Alaska.

By then U.S. shipping interests who defend the Jones Act had also swung into action, vigorously lobbying the federal administration against the exemption.

By the time the ship and rig neared Alaska the exemption had not come through. The vessel diverted to Vancouver, B.C., and dropped off the rig and departed. The stop in Vancouver also allowed repair work to be done.

The rest of the voyage to Alaska was by Foss Maritime tugs, which are U.S.-built and operated. The rig made it to Cook Inlet and began drilling what is now the Kitchen Lights discovery.

Although the rig had stopped in a Canadian port for repairs, breaking its journey from the U.S. Gulf to Alaska, the Department of Homeland Security still asserted that a violation of the Jones Act had occurred and slapped the company with a $15 million fine.

At that time, however, Davis was ousted as president by his investors, who reorganized the company as Furie and continued the exploration program.

Furie has appealed the fine and the matter is still unresolved. Furie would not comment on the matter and a telephone inquiry by the Journal of the Department of Homeland Security was not returned.

Tim Bradner can be reached at tim.bradner@alaskajournal.com.

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