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Vol. 17, No. 32 Week of August 05, 2012
Providing coverage of Alaska and northern Canada's oil and gas industry

Point Thomson progress

Army Corps releases final EIS; permit decision coming soon on Exxon project

By Wesley Loy

For Petroleum News

Production from Alaska’s undeveloped Point Thomson oil and gas field moved a big step closer to reality with the release of a final environmental impact statement.

The U.S. Army Corps of Engineers will use the EIS as a basis for whether to grant a wetlands fill permit to ExxonMobil for its planned natural gas condensate development at Point Thomson.

The Corps said July 27 it would be at least 30 days before it signs a “record of decision.”

As it awaits the permit, ExxonMobil is working on a number of fronts to advance its project, which would involve construction of well pads, brawny gas-handling facilities and a 22-mile pipeline to carry petroleum liquids.

Once production starts — ExxonMobil is targeting early 2016 — it will culminate decades of effort to realize some output from Point Thomson, which would become the easternmost producing field on the North Slope.

“We are encouraged that the Final Environmental Impact Statement has been published by the U.S. Army Corps of Engineers in accordance with its schedule,” ExxonMobil said in a statement to Petroleum News. “We are hopeful that with the achievement of this milestone the Corps will issue its Record of Decision and Section 404/10 Permit in late September 2012, also in accordance with the stated schedule. ExxonMobil has worked collaboratively with the U.S. Army Corps of Engineers to fully support the Environmental Impact Statement process with timely submission of technical information.”

Company executives say Point Thomson development is a multibillion-dollar undertaking.

No preferred alternative

The EIS does not choose a preferred project design. Rather, it analyzes five alternatives, one of which is ExxonMobil’s proposed development.

Point Thomson is located on state-owned acreage 60 miles east of Prudhoe Bay, next to the Arctic National Wildlife Refuge. The field straddles the Beaufort Sea coastline.

ExxonMobil discovered the field with wells drilled in the 1970s. The Point Thomson unit was formed in 1977.

The Point Thomson field is believed to be especially rich in natural gas, holding an estimated 8 trillion cubic feet. The field also holds hundreds of millions of barrels of crude oil and other petroleum liquids.

ExxonMobil has long said the lack of development at Point Thomson was due to the need for a North Slope natural gas pipeline, plus technical challenges associated with the extremely high-pressure reservoir.

In recent years, however, state officials demanded development, and in March the state and the Point Thomson leaseholders signed a settlement resolving the legal dispute over the unit.

Besides ExxonMobil, which is field operator, other major Point Thomson stakeholders include BP and ConocoPhillips.

Under the legal settlement, ExxonMobil now is pursuing an “initial production system” to produce a modest 10,000 barrels per day of condensate. The process involves bringing gas to the surface, collecting the liquids and then shooting the dry gas back underground.

The project features up to five wells — two were previously drilled and suspended — on three coastal production pads.

How alternatives compare

Besides a “no action” alternative and ExxonMobil’s proposed project, the remaining EIS alternatives offer different configurations for pads, roads and other field components. The analysis looks at how different approaches affect noise levels and the remote area’s “visual aesthetics.”

ExxonMobil’s project would locate the three pads right on the coastline. Long-reach directional wells would angle out to tap the gas reservoir beneath the Beaufort Sea.

The central pad, the largest of the three, would support a central gas processing facility.

The company also wants to build a barge dock and service pier, and connect the central, east and west pads with gravel roads. A gravel airstrip to accommodate a C-130 cargo plane would be constructed south of the central pad, about three miles inland.

Gravel and dredged material fill discharged into waters and wetlands would total more than 3.3 million cubic yards on 267.5 acres, an Army Corps public notice said.

The other three action alternatives generally push some of the well pads farther inland, or emphasize using ice rather than gravel fill for the pads, roads and airstrip. The east and west pads would be a half-mile inland, and the central processing facility would be two miles inland. Some alternatives take away the barge dock.

The idea, says the EIS, is to minimize coastal impacts on marine mammals, fish and subsistence activities, and to safeguard against coastal erosion.

But moving pads inland might prevent access to some of the Point Thomson reservoir, the EIS says.

The Corps says it is “considering additional mitigative measures, including those proposed by the public and agencies to avoid, minimize, rectify, reduce or compensate for potential impacts to the environment.”

The 22-mile export pipeline

ExxonMobil and its affiliate, PTE Pipeline LLC, want to build a 22-mile export pipeline to carry Point Thomson liquids west to the existing North Slope pipeline network at the Badami field. The elevated pipeline, 12 inches in diameter, would run roughly a mile inland from the coast.

ExxonMobil and PTE have applied to the State Pipeline Coordinator’s Office for a right of way across state land.

Some alternatives in the EIS take a different approach, pushing the export pipeline farther inland. One alternative would have the pipeline run a much greater distance, 51 miles, tying into the existing Endicott pipeline.

The EIS is posted at pointthomsonprojecteis.com.



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