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New ANS facilities needed Longer field life has downside; with new 70-80 year outlook for Prudhoe more North Slope facilities will be replaced Kristen Nelson Petroleum News
North Slope production is expected to last much longer than was expected in the 1970s.
That’s the good news, Darren Jones, vice president commercial assets for ConocoPhillips Alaska, told the Alaska House Special Committee on Ways and Means Jan. 31.
The corresponding bad news, he said, is that facilities were built based on a 30-year life, not a 70-80 year life.
“The higher oil prices and the ability to apply technology, develop heavy oil, get more recovery from existing fields — all kind of combine together to say the field life of our fields will be much greater than we had ever planned,” said Jones.
And this isn’t just specific to pipelines, he said, but is related to North Slope facilities in general.
When the development of Prudhoe Bay was approved in the 1970s, “it was thought it would last until 2015. Now we think Prudhoe oil will last until 2040 or 2050, quite a bit longer.” The facilities, however, were built for a 30-year life, not for a 70- or 80-year life.
“Nobody, anywhere, would have built for that period of time,” he said.
Since the facilities are older, repairs are needed and also replacements for things that have become obsolete — manufacturers may not even make the parts of things that were built in the 1970s, he said.
So the companies are going to “need to go back in and do some work at our older fields to bring them up to current technology and really make them last the next 40 or 50 years that we all want to see happen.”
Repairs, replacement continuous That doesn’t mean that “nothing’s been repaired or replaced for 30 years and suddenly we’re discovering everything’s not up to shape,” he said.
“Everything gets replaced periodically.”
Jones said the issue is that some infrastructure will need to be replaced now, and obsolescence issues addressed. The operator of Prudhoe is working on a plan for that field, Jones said, and ConocoPhillips, as Kuparuk operator, is working on a plan there.
It’s a renewal issue, he said.
“How do we renew the facilities in an intelligent way?” You don’t necessarily just want to replace things, Jones said, “if you can get by with smaller pipe sizes or less facility because there’s less oil now.”
“You want to do it in an intelligent, well thought out, planned manner.”
Those plans, he said, are being developed.
“We have long-range plans that have placeholders for the amount of money that will be spent updating the fields and different activities are already under way.”
The committee was focused on declining production and Jones said higher downtime, caused by work required at the older facilities, “probably has been a driver of lower production than we expected … three, four years ago.”
The companies will make the lifecycle replacements needed, he said, but that also impacts production, because doing those replacements put engineers to work on those things, which are more focused on “maintaining volumes than adding brand new volumes.”
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