The now defunct Kotaneelee gas plant in southeast Yukon. (Mike Thomas/Yukon News file)

Yukon’s government-owned Kotaneelee well set to be abandoned this summer

Work on the well should be completed by early August, according to a request for proposals

The Yukon government wants to officially seal off and abandon a derelict gas well at the Kotaneelee gas field this summer.

The Department of Energy, Mines and Resources issued a request for proposals this week looking for a company to seal off the well, which is owned by the Yukon government, in the Liard Basin by the first week of August.

“We have some flexibility in there but if we’re going to get the work done this summer it has to be done while the barge can still operate,” said John Fox, assistant deputy minister for oil and gas.

The request for proposals closes June 28. The document estimates that the work will be done between July 16 and Aug. 3.

The well’s previous owner, Houston-based EFLO Energy Inc., went insolvent in 2015. EFLO held the licenses for all four wells at Kotaneelee.

Licenses for three of the wells were turned over to another Houston-based energy company, Apache, but the fourth became the property and financial responsibility of EMR’s oil and gas branch.

Fox said the government tried to pay Apache, now known as Paramount, to abandon the government’s well last year when work was being done on the other three but ran out of time.

The government’s contract includes the down-the-hole abandonment, cutting and capping the well head and some cleanup of the well site.

The project is expected to cost $2.4 million. EFLO only left about $600,000 to cover the costs. The Yukon government will have to pay for the rest for now. Fox said the ownership of the wells in Kotaneelee is “complicated.” He said the government is looking for other companies that might be responsible for covering the extra costs.

“There may be other interest owners associated with EFLO that under our legislation … would also be responsible for payment.”

This year’s contract does not include remediation work. Fox said that will be part of a separate tender.

“What won’t be done this year is any remediation of contaminated soil. We don’t have a good idea of what that is,” he said.

Fox said generally there is not a lot of contamination around well heads but that the government wants “to ensure that any contaminated material is removed.”

The well is being capped with a steel cap welded on top of the casing. The territory’s environmental assessment board had recommended using a vented cap but the Yukon’s regulations do not allow for that.

Fox said the government considered changing the regulations but decided to leave them as is.

“Some jurisdictions in Canada require the use of vented well caps and some don’t. Industry standard practice is both and certainly hundreds of thousands of wells in western Canada have been abandoned with non-vented well caps.”

Contact Ashley Joannou at ashleyj@yukon-news.com

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