Whitehorse Daily Star

Company eyes restart of natural gas production

Plans are underway to restart the production of natural gas in southeast Yukon.

By Chuck Tobin on October 29, 2014

Plans are underway to restart the production of natural gas in southeast Yukon.

EFLO Energy Yukon Ltd. applied last month for an environmental and socio-economic assessment of its proposal.

After determining the application contained all the necessary information for a review of the project, the assessment board’s Watson Lake office put out a call Monday for public input into the application.

After years of successful production from the Kotaneelee gas field beginning in 1979, the wells were shut down in 2012 as natural gas resources dwindled, resulting in a greater volume of ground water to manage during production.

The company is proposing to work over two of the existing wells beginning in January or June 2015, depending on how long the assessment board takes to complete its review, says the application.

It says once the work is done, the gas field will be ready for production at a rate of five million cubic feet per day, which is far below the peak achieved in 1999 but on par with production levels in the last couple of years of operation.

The EFLO application and the assessment board’s public notice both emphasize the proposal does not involve hydraulic fracturing, or fracking.

In addition to reworking the two wells, the company is seeking to re-activate a gravel quarry near the camp to support upgrades and repairs to the existing network of roads, as well as provide for the construction of new roads.

The company purchased the controlling interest in the Kotaneelee Gas Project in 2012.

A Yukon government document written in 2011 indicated EFLO had plans to bring one well back into production, while reworking the other well to test the potential for shale gas.

Unconventional methods or fracking are commonly used in shale gas deposits.

A company information package indicates there is still ample potential for conventional gas it has under lease but much greater potential for shale gas.

Annual production from the Kotaneelee project peaked at 22 billion cubic feet in 1999, resulting in government royalties of just over $10 million, according to records.

From 1993 to 2012, the Kotaneelee Gas Project generated $45.4 million in royalties.

The natural gas was moved on the Spectra Energy Pipeline to a facility in Fort Nelson, B.C.

The entire site – existing 18-room camp, onsite processing plant, airstrip – and production is still licensed.

The site is accessible using an established winter road that follows the pipeline and an existing barge service and summer road, the application points out.

EFLO is planning to set up a temporary camp to house additional workers required to get the project rolling again, as onsite employment is expected to top out at 45 during the ramping-up phase.

Currently, there is a moratorium on hydraulic fracturing in the Yukon pending the outcome of the work by the special legislative committee established last year to investigate the risks and benefits associated with fracking.

The committee is scheduled to deliver its report to the legislative assembly during this sitting, which is scheduled to end Dec. 16.

EFLO officials could not be reached for comment.

The Kotaneelee gas field is the Yukon’s only producing gas field, although Northern Cross is currently involved in an extensive exploration program for oil and gas on Eagle Plain in northern Yukon.

Comments (7)

Up 5 Down 0

Wilf Carter on Nov 2, 2014 at 9:41 am

So anti frackers that stated our water is going to be destroyed by fracking when it is moving to air now to frack with? Do anti fracking groups, Mayor Curtis, Councillor Cameron agree with Thomas statement? Do you agree with starting up of the gas field in the Yukon? Do you agree with the Yukon receiving royalties that could be used for affordable housing? Mayor Curtis and Councillor Cameron are you going to work with the YTG on a possible server farm for the Yukon so the COW could use the bye-product hot water to heat the COW building and reduce energy cost to the COW and then you can reduce the taxes by 2% not raise it by 12%.
Councillor Irwin stated early this year - why are our energy costs so high? Good question! Maybe COW should turn off some of their lights and lower the heat at night like most people do! Councillor Irwin was very correct in her concern about good public business management to reduce the unnecessary cost to the citizens in the COW.
What do you think Mayor Curtis and Cameron the COW looks forward to your response. Councillor Stockdale maybe you can help them to answer the questions. Dave you and I have known each other since the early 1990's, can you put common sense in the COW and get on with business? At least Councillor John S made his position known, good job. I think voters like it when an elected official speaks their mind on issues. This means you are getting the best from that person. When they do that they are not right or wrong but giving outlook. We need more open common sense, not this game of no results politics.

Up 9 Down 0

Wilf Carter on Oct 31, 2014 at 5:12 pm

The Yukon has received over $10 million dollars in royalties from this field. So the COW mayor and council can invest their money not tax payers money into gas drilling and take the royalties and invest it in housing if that is their number one business idea.
The First Nations in Alberta have and are making millions of Dollars every year off of oil and gas development. Does the COW support fracking or oil and gas development? Does the COW want royalties to be paid to the Yukon? Maybe the COW should ask for the royalties to build public housing?
At the next Council meeting I'd like to see mayor and council pass a motion if they support or not support fracking/oil and gas. John does not so he has made his beliefs known, good for John. What are the COW going to do about the deficit of $3.3 million dollars? Are they going to raise taxes again? Please stand up and tell the people of Whitehorse what direction you going on tax increases. I like to see a 2% reduction in taxes and I think COW residents deserve that. Don't you agree mayor and Councillors? Even better why don't we have open vote on taxes and let the people of COW to decide!

Up 13 Down 0

Wilf Carter on Oct 30, 2014 at 9:36 pm

I agree with Thomas

Up 10 Down 1

yukon56 on Oct 30, 2014 at 4:21 pm

Wilf is everywhere!!

Up 34 Down 5

Oldtimer on Oct 29, 2014 at 8:42 pm

I wonder if the First Nations that are so against fracking , LNG, and development in the oil and gas industry will accept the royalty cheques? I also would like to know if they will return any royalty cheques that they have received in the past? Just curious

Up 37 Down 1

Thomas Brewer on Oct 29, 2014 at 4:59 pm

Sure would be nice to have a clean burning, efficient fuel to heat our homes with (not to mention cooking on gas!) versus diesel fuel. Whenever I tell friends Outside that most of us heat our homes with expensive diesel, they think I'm joking.... sadly, I'm not.

Up 41 Down 1

Wilf Carter on Oct 29, 2014 at 4:32 pm

Good news jobs and royalties for the Yukon and Yukon First Nations governments.

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