Natural gas production has begun flowing at a rate of 15 MMcf/d from the Ninilchik Unit in Cook Inlet, AK, and should approach 40 MMcf/d by year’s end, partners Marathon Oil Co. and Unocal Corp. said Wednesday. Ninilchik is connected to the new Kenai Kachemak Pipeline (KKPL), which will serve residential, utility and industrial markets on the Kenai Peninsula and other parts of south-central Alaska.

The Ninilchik discovery, announced in January 2002, is located about 35 miles south of Kenai, AK. Current production is from two wells at the Grassim Oskolkoff location, and two additional wells at a second production location are expected to come online in October. Marathon operates the Ninilchik Unit with a 60% working interest; Unocal holds the remaining 40%.

“The successful development of the Ninilchik discovery is an important element of Marathon’s ongoing Cook Inlet natural gas business,” said John Barnes, Marathon’s Alaska Asset Team Leader.

Along with the gas discovery, Marathon and Unocal teamed up in January to construct the 32-mile, 12-inch KKPL. The pipe’s construction followed an open season in which Marathon and Unocal committed to transport gas for a 15-year period. Marathon holds a 60% stake in Kenai Kachemak Pipeline LLC, the company formed to build and operate the pipeline, while the remaining interest is held by GUT LLC, a Unocal subsidiary.

“The start-up of the Ninilchik Unit and the Kenai Kachemak Pipeline is a major milestone in Unocal’s efforts to commercialize its South Kenai gas position,” said Charles Pierce, vice president, Unocal Alaska. “We are making significant investments to grow this business to help meet the increasing need for new sources of natural gas in south-central Alaska.”

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