News Release March 27, 2001
FOR IMMEDIATE RELEASE
EUB ACCEPTS UNIQUE COLLABORATIVE LANDOWNER AND INDUSTRY AGREEMENTS FOR SOUR GAS OPERATIONS AND LAND DEVELOPMENT SOUTHEAST OF CALGARY
Calgary, Alberta (March 27, 2001) The Alberta Energy and Utilities Board (EUB) today issued Decision Addendum 2000-20, which announces a Land-use and Resource Development (LRD) agreement for certain sour gas well and pipeline operations and eventual urban development on lands southeast of current Calgary city limits. This unique collaborative approach has been taken between landowners and the petroleum industry to link accelerated sour gas production and subsequent abandonment and reclamation of sour gas facilities with potential future land development. The LRD agreements accepted by the EUB allow the production of a valuable petroleum resource, and set a definite timetable for landowners to move forward with their plans for the affected land parcels.
The Decision Addendum announced today involves agreements reached between directly involved landowner families and the energy companies Dynegy Canada Inc. and Compton Petroleum Corporation (see attached backgrounder). Under the terms of the LRD, Compton plans to apply to the EUB for approval to drill two new horizontal sour gas wells from an existing sour gas wellsite in the area of Section 13, Township 22, Range 29 west of the 4th meridian in order to affect accelerated depletion of its gas reserves from the Okotoks Wabamun "B" pool. This land is south of 178th Avenue East, and east of 72nd Street East. Any produced gas from these wells (should they be approved by the EUB) would be transported via the existing Dynegy Chestermere pipeline.
The Dynegy sour gas pipeline runs generally south for a distance of 10.3 kilometres within an area south of Highway 22X, east of 88th Street East and crossing the Bow River north of Dunbow Road, outside of the Calgary city limits. The pipeline consists of level 1 and 2 segments and transports sour gas containing up to 38% hydrogen sulphide (H2S).
The EUB accepts the commitment of the parties involved and will continue the licences of the pipelines for a period of 16 years as specified in the LRD agreement. At that time that portion of the Dynegy Chestermere pipeline north of the Bow River will be decommissioned and abandoned. The Compton wells would also be fully abandoned and reclaimed by the expiry of that 16 year term, at which time the respective lands on which these operations were located could be used for future urban growth.
-30-
This news release and Decision Addendum 2000-20 are available on the EUB web site at www.ercb.ca
For further information please contact:
Greg Gilbertson, Senior Advisor
EUB Communications
Tel: (403) 297-3648
Fax: (403) 297-3757
NR 2001-07
EUB DECISION ADDENDUM 2000-20 ON LAND-USE AND RESOURCE DEVELOPMENT (LRD) AGREEMENTS
On March 31, 2000 the Alberta Energy and Utilities Board (EUB) issued Decision 2000-20, an interim approval on an application by Dynegy Canada Inc. (Dynegy) for the continued operation of a sour gas pipeline and sweet fuel gas pipeline southeast of Calgary. The decision also approved an application by Pinon Oil and Gas Ltd. (Pinon) to construct and operate a new sour gas compressor station and sour gas pipeline in the same general area.
This interim approval allowed the continuance of pipeline operations until November 1, 2000, with the objective of reaching longer term agreements on the continuance of operations by that date. The EUB expected that Dynegy and local landowners would work towards an agreement on a framework that allowed Dynegy's pipelines to continue operations, but which also allowed for the planning and development of urban growth into the pipeline area in the future. At the time, the EUB stated that should Dynegy and local landowners fail to reach an agreement by October 1, 2000, the EUB would, based on evidence heard at a public hearing that began August 18, 1999, prescribe a plan, and/or establish a fixed operational term limit for the pipelines.
The EUB subsequently granted an extension of this time period, on the recognition that progress was being made in discussion towards an agreement.
Compton Petroleum became involved in the process because it holds valid Petroleum and Natural Gas (P&NG) leases on lands involved in EUB Dynegy/Pinon Decision 2000-20, and wanted to both retain and exercise its rights to the production of those resources.
Decision 2000-20 outlines the issues involved in the original hearing, contains a series of maps that illustrate the sour gas resource base in relation to various landowners and refers to eight other reference documents.
EUB Decision Addendum 2000-20 contains the two agreements made between the landowners and the petroleum companies, Dynegy Canada Inc. and Compton Petroleum Corporation.
-30-
