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AOGCC investigating Prudhoe propane
The Alaska Oil and Gas Conservation Commission is investigating a claim that BP might potentially be wasting propane through its operations at the Prudhoe Bay unit.
The state regulatory agency on Jan. 3 asked the company to provide information about its natural gas liquids infrastructure and production activities at the major North Slope unit.
The AOGCC gave BP 30 days to answer questions about the natural gas liquids infrastructure at Prudhoe Bay, the volume and composition of the production stream along that system and any limitations on the volumes that could be used or sold. “We’ll work co-operatively to make sure the agency has the information necessary to understand the natural gas liquid usage at Prudhoe Bay,” BP spokesman Steve Rinehart said.
Attempt to launch propane operation The investigation comes at the request of Harold Heinze, the outgoing CEO of the Alaska Natural Gas Development Authority. Although ANGDA has been trying for years to launch a propane wholesale operation on the North Slope, Heinze filed the request as a private citizen. By statute, the AOGCC is required to investigate all claims of waste.
BP and the other working interest owners at Prudhoe Bay considered ANGDA’s proposal to build a propane plant, but “have not gone further than that,” Rinehart said.
On the claim that BP is wasting propane at Prudhoe Bay, Rinehart said, “We don’t waste gas. We use it to produce oil,” referring to the natural gas used to run facilities and increase oil recovery. When it comes to natural gas liquids specifically, BP uses propane as a miscible injectant to enhance oil recovery, and also mixes “thousands of barrels” of natural gas liquids into the crude oil stream that goes down the trans-Alaska oil pipeline.
While some propane is used to improve oil recovery, more is injected as residue gas, Heinze claimed. “Because of the limited production life of Prudhoe Bay, the propane that could be recovered and marketed at this time will be left in the reservoir at shut down. That future lost recovery is the preventable waste of a valuable hydrocarbon,” he wrote.
Rinehart acknowledged that BP does re-inject some propane back into the field as part of the residue gas stream. Whether that constitutes waste is up to the AOGCC to decide.
—Eric Lidji
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