Pipelines, drill sites, production facilities completed this winter at Alpine CD3, CD4 satellites

Winter work completed this year at Alpine satellites Fiord and Nanuq included drilling at Fiord (CD3), a road-less drill site with drilling limited to winter, a ConocoPhillips Alaska spokeswoman told Petroleum News. Fiord is north of the main Alpine facilities, Nanuq is to the south. Work at both satellites included construction of the pipelines and drill site production facilities, with on-pad piping including a test separator, heater and fuel gas conditioning skid.

Pipeline bridges, supports and pipe were also constructed.

“To minimize impact, temporary ice roads, constructed during winter, are used to move construction equipment, facilities, drilling rigs and drilling supplies to the sites,” she said.

Total investment in the two satellites is about $500 million. Much of the Nanuq (CD4) work was completed last winter, she said, with some 600 people working on construction of the two satellite developments each year.

Doyon Drilling was the primary drilling contractor. Other project contractors included: M-I Swaco (drilling fluids and waste management), Sperry Drilling Services (directional drilling and logging) and Schlumberger (cementing and pumping), Arctic Slope Energy Services (pipeline work), Swalling Construction (bridges), Nanuq and Peak Oilfield Services (ice roads), Conam Construction (facilities), VECO Alaska (communications and power), VECO Engineering (engineering).

Both satellites are expected to come online in late 2006.

When asked how a production profits tax might impact future Alpine satellite development, the spokeswoman declined to comment, but Alliance manager Paul Laird said “any tax increase makes all Alaskan investments less attractive and less likely to attract capital. That’s even true of the original PPT negotiated between the administration and the three major North Slope producers, which amounts to a doubling of current severance taxes and roughly a $1 billion annual tax increase on the industry at current price and production levels.

“The upside is that the system agreed to by the governor and the producers could serve as a catalyst to a $25 billion gas project, but the changes being considered in the House and Senate put a gas project and long-term oil investment at risk. That would significantly reduce the life expectancy of TAPS, and would certainly make companies like ConocoPhillips and Anadarko think twice before making long-term investments in new projects like the Alpine satellites,” Laird said.

—Petroleum News