Idaho commercial gas production on the way

Alta Mesa's new pipeline will link wells to a dehydration plant in Payette County.

rbarker@idahostatesman.comJuly 18, 2014 

NEW PLYMOUTH - Alta Mesa Idaho plans to drill five more wells this summer as it moves toward making the state a natural gas producer.

"Now we're in the exploration phase," Hal Chappelle, president and CEO of Alta Mesa, said Thursday. "We want to be in the development business."

The Houston-based company showed Gov. Butch Otter and other state officials the route of its 11-mile pipeline and its nearly completed dehydration plant near the Williams Pipeline and Idaho Power Co.'s Langley Gulch power plant. The new facility will remove water from the gas before sending it to customers.

Meanwhile, the Bureau of Land Management hosted a public meeting Thursday at the Payette County Courthouse to explain its plans to offer leases on 5,355 acres within and adjacent to Alta Mesa's Willow-Hamilton Natural Gas Field six miles east of Payette.

The federal mineral leases, some of which underlie private land, are in the same unit where Alta Mesa already has producing wells.

"The lease sale would allow for the orderly development of the federal oil and gas resource and the payment of royalties to the United States," said BLM Assistant District Field Manager Matt McCoy.

The federal and state treasuries will share in the revenues from the unit. But oil and gas are not going to be a windfall for the state the way they been in North Dakota, Wyoming or even Utah.

A University of Idaho report in 2013 predicted annual Idaho gas revenues of $206 million. That would generate more than $5 million for state coffers from a 2.5 percent severance tax and $5.7 million in royalties for the state's schools and other land trust beneficiaries.

By comparison, North Dakota's 1 million barrels of oil a day contributes $2.9 billion in taxes and royalty revenues. Utah brings in about $300 million and Wyoming about $350 million.

In Payette County, Alta Mesa's pipeline will run 20 feet below the Payette River and under several canals. The company has a right-of-way that gives workers 24-hour access to the pipeline's seven valves along its 11 miles, said Ronda Louderman, Alta Mesa regulatory specialist.

"We will always be monitoring this pipeline continuously," Louderman said.

At its peak, 100 people will work on pipeline construction this summer and fall. The company's drilling employs about 20 workers.

Once completed, the dehydration plant will be able to process 20 million cubic feet of gas per day, enough to heat about 100,000 homes. With Alta Mesa's wells producing up to 4 million cubic feet of gas a day, the company hopes to use the plant's full capacity when it opens this fall, said Dale Hayes, Alta Mesa vice president for engineering.

Rocky Barker: 377-6484

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