BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

IN THE MATTER OF THE APPLICATION OF TOTEM GAS STORAFE SOMPANY, L.L.C. FOR AN ORDER APPROVING THE STORAFE OF NATURAL GAS IN THE TOTEM GAS STORAGE RESEROIR, ADAMS COUNTY, COLORADO

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CAUSE NO. 1

 

ORDER NO. 1-87

 

REPORT OF THE COMMISSION

 

This cause came on for hearing before the Commission at 8:30 a.m. on January 10, 2000, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado on the application of Totem Gas Storage Company, L.L.C. for an order, pursuant to Title 34, Article 64, C.R.S., approving certain lands as the Totem Gas Storage Project in the J-1 Formation.

 

FINDINGS

 

The Commission finds as follows:

 

1. Totem Gas Storage Company, L.L.C. (Totem) as applicant herein, is an interested party in the subject matter of the above-referenced hearing.

 

2. Due notice of the time, place and purpose of the hearing has been given in all respects as required by law.

 

3. The Commission has jurisdiction over the subject matter embraced in said Notice, and of the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order.

 

4. On June 30, 1999, Totem, by its attorney, filed with the Commission a verified application for an order, pursuant to Title 34, Article 64, C.R.S., approving the Totem Gas Storage Project in the J-1 Formation, consisting of the lands described below:

 

Township 2 South, Range 62 West, 6th P.M.

Section 4: SE and W

Section 5: All

Section 6: E and SW

Sections 7-9: All

Section 16: W

Sections 17-19:All

Section 20: W and NE

Section 30: N

 

Township 2 South, Range 63 West, 6th P.M.

Section 12: E

Section 13: E

Section 24: E

Section 25: NE

 

Adams County, Colorado, containing 7,680 acres more or less

 

5. Totem requests an order from the Commission approving the proposed gas storage project so that, if necessary, condemnation of the below-listed lands may be exercised:

 

Township 2 South, Range 62 West, 6th P.M.

Section 19: W

Section 30: NE

 

Adams County, Colorado, containing 480 acres more or less

 

Township 2 South, Range 62 West, 6th P.M.

Section 5: All

Section 7: All

Section 9: All

Section 17: All

Section 19: All

 

Township 2 South, Range 63 West, 6th P.M.

Section 12: E

Section 13: E

Section 25: NE

 

Adams County, Colorado, containing 4,000 acres more or less

 

6. At the time the application was filed with the Commission, the Applicant requested the matter be docketed for the September hearing. On July 26, 1999, Colorado Interstate Gas Company (CIG) filed with the Commission a Motion to Dismiss the Application. Subsequently, Totem requested the matter be continued to the December hearing. On November 17, 1999 CIG filed with the Commission a Motion to Withdraw the Motion to Dismiss but Maintain Intervention. On November 23, 1999 a prehearing conference was convened with the parties by the Commission staff. On November 24, 1999, Totem requested the matter be continued to the January, 2000 hearing in order to provide proper notice to newly discovered parties.

 

7. Testimony and exhibits presented at the administrative hearing described the need for additional gas storage in the area and indicated that potential customers have been identified.

 

8. Testimony and exhibits presented at the administrative hearing indicated that Totem has obtained approximately 98% of the surface storage rights and the mineral storage rights in the proposed gas storage field.

 

9. Geologic testimony and exhibits presented at the administrative hearing indicated the J-1 Sand is a suitable reservoir for gas storage, with no evidence of adverse impacts from fracturing. Additional geologic testimony indicated the Fox Hills aquifer is unlikely to be affected by the gas storage project.

 

10. Testimony and exhibits presented at the administrative hearing indicated that the pressure in the J-1 Sand was depleted between 1972 and 1984 when the majority of the production occurred and that it is more economical to leave the remaining gas in place to be used as cushion gas in the storage project rather than to drill new wells to recover low reserves. Additional testimony presented the plan for each existing well describing that three (3) wells will be reentered and properly plugged, six (6) wells will be converted for observation, seven (7) wells will be used for injection and nine (9) new wells will be drilled for injection.

 

11. Testimony and exhibits presented at the administrative hearing based on the results obtained from performing a computer model on reservoir characterization/field history, reservoir and facilities conversion design and achievable storage performance profiles indicated that all of the gas can be contained within the boundaries of the storage field, that no migration outside the field should occur and that the buffer zone surrounding the storage field will be more than adequate.

 

12. Engineering testimony and exhibits presented at the administrative hearing described the four (4) wells currently productive in the J-1 Sand in the Totem Field with remaining reserves estimated at 323,689 MCF. Additional testimony indicated that approximately 93.1% of the original gas-in-place has been recovered and that potential gas reserves attributed to a new well will not be sufficient to pay out the cost of drilling and completion for the new wells. Further engineering testimony indicated that the J-1 Sand reservoir appears to be well suited for use as a gas storage reservoir.

 

13. Testimony and exhibits presented at the administrative hearing indicated that in recent fracture jobs of depleted J-1 Sand wells, fracture gradients from 0.60 to 0.61 psi/ft. were experienced, resulting in a fracture pressure of approximately 4400 psi. Additional testimony indicated the gas storage project would be operated at a maximum operating pressure of 3200 psi, providing a safety margin of approximately 1200 psi of operating pressure below fracture pressure. This may also be expressed as a safety margin of twenty-seven percent (27%) below fracture pressure.

 

14. Testimony and exhibits presented at the administrative hearing indicated the Totem Gas Storage Project is in the public interest and welfare, the J-1 Sand is a suitable and practicable reservoir, and the J-1 Sand is nonproductive of oil or gas in commercial quantities.

 

15. At the time of the administrative hearing, the Applicant agreed to be bound by oral order of the Commission

 

16. Based on the facts stated in the verified application, having received one protest to the application which was subsequently withdrawn and having been heard by Hearing Officers who recommended approval, the Commission should enter an order, pursuant to Title 34, Article 64, C.R.S., approving certain lands as the Totem Gas Storage Project in the J-1 Formation.

 

ORDER

 

NOW, THEREFORE IT IS ORDERED that, pursuant to Title 34, Article 64, C.R.S. the Totem Gas Storage Project in the J-1 Formation consisting of the lands described below is hereby approved:

 

Township 2 South, Range 62 West, 6th P.M.

Section 4: SE and W

Section 5: All

Section 6: E and SW

Sections 7-9: All

Section 16: W

Sections 17-19:All

Section 20: W and NE

Section 30: N

 

Township 2 South, Range 63 West, 6th P.M.

Section 12: E

Section 13: E

Section 24: E

Section 25: NE

 

Adams County, Colorado, containing 7,680 acres more or less

 

IT IS FURTHER ORDERED that the Totem Gas Storage Project shall be operated with a maximum operating bottom hole pressure of 3200 psi.

 

IT IS FURTHER ORDERED that the provisions contained in the above described order shall become effective forthwith.

 

IT IS FURTHER ORDERED that the Commission expressly reserves its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.

 

ENTERED this day of January, as of January 10, 2000.

 

OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

 

By

Patricia C. Beaver, Hearing Officer

 

Dated at Suite 801

1120 Lincoln Street

Denver, Colorado 80203

July 25, 2019