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RCA accepts revised Vision-Enstar contract
Kristen Nelson Petroleum News
The Regulatory Commission of Alaska has approved an amendment to the gas sales agreement between Alaska Pipeline Co. and Vision Resources. Enstar Natural Gas Co., which owns Alaska Pipeline Co., requested the amendment approval in April. RCA approved the amendment June 1.
Vision will be providing less gas than the Feb. 4, 2021, gas sale agreement specified.
The amendment cites "production challenges caused by uncertainties and shutdowns for maintenance" as explanation for Vison being "unable to meet the previously agreed upon" daily and annual natural gas volumes.
The amendment says the seller, Vision "agrees to perform operations to enhance production so it can offer additional purchase options to allow Buyer the opportunity to secure additional gas over the remaining Term of the GSA."
The original GSA called for Vision to provide 3,000 mcf (thousand cubic feet) per day of firm gas, 3 million cubic feet, from the date of the original contract in March 2021 through the first quarter of 2028.
The amended GSA drops the firm gas commitment to 2 million cubic feet per day in the second quarter of 2023 and the volume declines steadily to 400 mcf per day in the first quarter of 2028.
Slowly declining production Alaska Oil and Gas Conservation Commission records show slowly declining production at the field, from an average of 4 million cubic feet per day at the end of 2018, to 3.5 million at the end of 2019, to 3.1 million at the end of 2020.
Vision became field operator effective May 1, 2021, and by December 2021, production was trending up, to 3.3 million cubic feet per day.
By December 2022, however, the average had dropped to 3 million and for April, the most recent month for which AOGCC production data are available, the field averaged 2.5 million cubic feet per day.
In approving the most recent plan of development for North Fork in January, the Alaska Department of Natural Resources' Division of Oil and Gas said "Vision plans to maintain production, including well workovers, additional perforations, or drilling new wells. New wells will depend on favorable economic conditions," the division said.
-KRISTEN NELSON
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