The now defunct Kotaneelee gas plant in southeast Yukon. (Submitted photo)

Sale of Kotaneelee wells by Apache should not affect abandonment

New owners Paramount Resources responsible for three of four wells

The recent sale of Apache Corp’s Canadian assets should not affect well abandonment or spill clean-up efforts at the defunct Kotaneelee gas plant.

On July 26, Houston-based Apache Corp. partitioned and sold its Canadian holdings in a $1-billion deal. The assets went to four different companies, including Paramount Resources, which picked up the Kotaneelee stake.

Brigette Parker, a spokesperson for the Department of Energy, Mines and Resources, said the sale should not impact either the abandonment of the three wells Apache sold, nor the cleanup of a spill at a building at Kotaneelee. Once the sale is finalized, she said, the responsibility for the three wells will simply transfer to Paramount.

“Once the company formally informs us of the change, the ownership and responsibility is transferred,” she said.

Apache became the owner of three of the four suspended gas wells in August 2015 following a spill of wastewater and lubricants stemming from a pump house at the remote facility 240 kilometres east of Watson Lake.

The owners at the time of incident, EFLO Energy, were found to be insolvent when asked to pay for the cleanup, resulting in the divvying up of their assets. Apache was found to be the majority shareholder of three of the wells and assumed responsibility for them.

The fourth well — the now infamous L38— was found to be the responsibility of the Yukon government, because EFLO was the sole shareholder.

The abandonment of this single well is slated to cost taxpayers $1.8 million.

The Yukon Socio-Economic Assessment Board recommended June 28 that a plan to permanently abandon the Kotaneelee wells be approved. The wells will be permanently sealed and infrastructure at the site dismantled. The proposal for abandonment was filed separately by both Apache and the Yukon government for their respective properties but was reviewed as a single proposal by YESAB.

Rob Yeomans, a spokesperson for YESAB, said the sale does not affect the board’s recommendations unless Paramount decides it wanted to do something different than what was in the initial abandonment proposal. In that case, the project would have to be reviewed again, Yeomans said.

The Yukon Development Assessment Board has until August 4 to make a final decision on the proposal. If approved, remediation and abandonment work could begin as early as April 2018.

The spill cleanup, which began in 2015, is ongoing.

Contact Lori Garrison at lori.garrison@yukon-news.com