Aliso Canyon unlikely to meet August return date

OREANDA-NEWS. June 14, 2016. Testing of the 114 wells at SoCal Gas' Aliso Canyon natural gas storage site near Los Angeles is progressing slowly, making it difficult for the gas company to meet its ambitious late August target date to return the facility to partial service.

Four wells at the 86 Bcf (2.4bn m?) Aliso Canyon site have successfully passed a series of well integrity tests required by the California Department of Conservation's division of oil, gas and geothermal resources (DOGGR), SoCal said in its latest report to the agency.

A major gas leak discovered in late October 2015 released 4.6 Bcf of gas from Aliso Canyon before a relief well was able to halt the leak in mid-February. California governor Jerry Brown ordered a moratorium on gas injections and restricted further withdrawals from the site until DOGGR oversees the safety review.

DOGGR has approved phase one temperature and noise test results for 72, or 63pc, of Aliso Canyon wells, unchanged from SoCal's previous report. Wells must pass these tests to advance to more complex well degradation testing or be taken off-line and isolated from the underground gas reservoir.

Eighteen wells failed the initial tests; six were not tested and results are pending for the rest. The report said 21 wells have been taken out of service, including four that failed the initial tests.

Of the remaining 70 or so wells, only 20 — or less than a third — have undergone some or all of the advanced tests, which include a casing-wall thickness inspection, a cement bond log and pressure tests. Nine rigs are on the site to perform the tests which began as early as January. The pace of testing picked up in March, according to SoCal's report, but tests take an average of 20 days per well.

Results from 89 tests are pending with the agency, down from 92 in SoCal's prior report. SoCal Gas chief operating officer Bret Lane said the utility wants to complete testing in time to obtain state approval to return the storage field to partial service by late August to avoid gas curtailments that could lead to rolling blackouts across southern California this summer and winter.

The agency's goal is to ensure that well testing can occur as quickly as possible and ensure the results safeguard the public.

"A team of engineers (is) dedicated to this project and reviewing (SoCal's) test results as soon as they are sent in," said California Department of Conservation spokesman Don Drysdale. "Some tests results are very clear cut. Some show anomalies that require additional explanation."

Aliso Canyon plays a critical role in supplying gas to 17 power plants and numerous oil refineries and agricultural processing plants in the Los Angeles basin. Without Aliso Canyon, gas supply problems could disrupt electric service on 14 or more days this summer for millions of southern California residents, state agencies have warned.

The field has about 15 Bcf of working gas remaining, of which 10 Bcf is available for reliability-based withdrawals. At the current level, withdrawals of 880mn cf/d could occur, about half the field's pre-leak withdrawal capacity of 1.86 Bcf/d.

SoCal has not said whether it is repairing wells that fail any of the safety tests or will simply plug them to speed the process so that gas can injected. If SoCal obtains DOGGR approval, the process of injecting gas could also take weeks since the field's pre-leak injection capacity of 600mn cf/d would likely be reduced.

SoCal has not said how much gas it hopes to inject into Aliso Canyon by late August. Regulators have said additional mitigation measures may be needed to address more severe winter reliability issues if working gas at Aliso Canyon does not reach 45 Bcf and injection and withdrawal capacity does not improve to 450mn cf/d and 1.4 Bcf/d, respectively.

The California Public Utilities Commission (CPUC) last week approved, without discussion, a settlement between SoCal and its largest customers for stricter operational flow orders designed to balance the gas system. Late last month, the commission voted to accelerate placement of electric storage systems in southern California to address Aliso Canyon challenges.

CPUC president Mike Picker, who has questioned whether Aliso Canyon will ever return to service, said energy storage was part of a larger plan to "expedite the next generation of energy solutions" in southern California.