NEWS BULLETIN

June 18, 1998 --- Vol. 4, No. 34June 1998

Point McIntyre EOR project approved by ARCO, BP, Exxon

The owners of the North Slope’s Point McIntyre oil field have approved a $44 million enhanced oil recovery project that will increase ultimate Point McIntyre oil recovery by more than 32 million barrels and add production of 5,000 barrels of oil per day by 2006, ARCO Alaska Inc. said in a written statement today.

ARCO, operator and part owner of the field, will oversee construction of the project, which is expected to create 140 construction-related jobs. ARCO will operate the EOR project when installation is complete in 1999.

The third largest oil field in the United States in terms of daily production, Point McIntyre lies onshore and offshore northwest of Prudhoe Bay. It contains an estimated 800 million barrels of oil in place, with 400 million barrels considered recoverable. In 1997 Point McIntyre produced an average of 160,000 barrels of oil per day. Although field production is in decline, ARCO spokeswoman Dawn Patience told PNA, “We’ll start to see incremental production increases in 2001 as a result of the EOR project.”

The project will require the fabrication of two truckable modules in Alaska, construction of a 12-mile pipeline and installation work on the North Slope to support the new development. Module fabrication and pipeline construction is expected to begin in early 1999. ARCO said contracts for these construction projects will be awarded later this year. VECO Engineering performed the initial engineering design work and will begin detailed engineering work for the project this month.

The project will incorporate state-of-the-art compressor technology to provide miscible injectant to the two Point McIntyre drill sites — one onshore at Point McIntyre and one offshore on West Dock. The high-speed, oil-free, intelligent motor compressor will decrease the size of the compressor module from 600 square feet to just 150 square feet. In addition, the weight of the facility will be reduced from 90 tons to only 27 tons, eliminating the need to barge the modules to the North Slope, said ARCO. Instead, the compressor modules can be transported by truck over the Dalton Highway.

The compressor is driven with electricity and operated with magnetic bearings and dry gas seals, eliminating the need for lubricating oil and increasing the long-term reliability of the compressors.

ARCO Alaska President and Chief Operating Officer Kevin Meyers said "The new compressor technology applied in this project has potential for use in development of new fields in Alaska and around the world.”

Production from the Point McIntyre field started in 1993. The field is produced through the Lisburne production facility at Prudhoe Bay and is owned by Exxon Company USA (38 percent), BP Exploration Alaska (32 percent) and ARCO Alaska Inc. (30 percent).

Exxon forms GTL study group

Exxon Corp. has formed a study group to look at the potential for a gas- to-liquids plant on Alaska’s North Slope, a company spokesman told PNA today. GTL is the process that converts natural gas to environmentally friendly liquid fuels, primarily diesel, naphtha and kerosene. Exxon has developed one of the world’s three leading GTL technologies and wants to develop a 100,000 barrels per day GTL plant in Qatar.

Although Exxon said it considers liquefied natural gas as the first option for Alaska’s Arctic gas reserves, the company feels that there is enough gas on the North Slope for both an LNG and a GTL project.

An LNG project would require the construction of an 800-mile pipeline to bring the gas to tidewater, whereas the liquids from a GTL plant could be transported in the existing trans-Alaska oil pipeline, which Exxon said would help keep pipeline volumes above minimum operating levels as oil production from the North Slope declines.


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