Hilcorp wants to plug five Cook Inlet wells for good

Hilcorp Alaska wants to permanently plug five of the nine wells at an offshore platform in Cook Inlet, in a basin Southcentral Alaska is worried about running short of.

In an Aug. 3 letter to the state Division of Oil and Gas, the company asked to dissolve its North Trading Bay Unit effective Nov. 1 and withdrew the development plan it had filed three months earlier. A unit is state permission to work several leases as a single field. Ending it does not end the leases.

Those three leases, covering 1,840 acres, would stay in force with rentals, royalties and plugging obligations intact. Two of them date to September 1962.

Hilcorp also asked to suspend operations and production on the leases for three years, through October 2029, calling it "necessary and justified in the interest of conservation." The suspension would give the company room to meet state plugging requirements while holding onto wells it may want later.

Eight of the nine wells at the Spurr Platform are already suspended and the ninth is shut in. Hilcorp proposes plugging five for good by November 2028 and keeping four suspended for possible future use. It would owe the state a platform construction plan by the end of this year and a funding decision by March 2029.

The timing is what makes it notable. Cook Inlet supplies gas to more than half of Alaska's population, and its output has fallen from more than 300 billion cubic feet a year in the 1990s to somewhere between 60 and 70 billion now. Utilities are planning liquefied natural gas imports, two have warned of steep residential rate increases starting in 2029, and legislators spent the summer arguing over which operators should be pressed to produce more. Hilcorp holds roughly 90 percent of Cook Inlet leases and has said it spends $400 million to $500 million a year in the basin.

The letter gives no cost for the plugging program and no production figures for the wells.

State regulations let the commissioner terminate a unit at any time with no notice or comment period. The division had published no decision as of Tuesday, and both requests are meant to take effect Nov. 1.