ExxonMobil says it has “completed a number of infrastructure milestones” on its Point Thomson development on Alaska’s eastern North Slope.
The company is building out a new field to produce natural gas condensate beginning in early 2016.
Point Thomson is located on state land along the Beaufort Sea coastline, about 60 miles east of Prudhoe Bay. The field has several minority owners, including BP and ConocoPhillips.
Significant work began this past winter at Point Thomson. The field will feature three drill pads, with process and compression equipment located on the central pad. The production facilities are expected to be extra brawny, to handle Point Thomson’s extraordinary subsurface pressures.
In a Sept. 13 press release, ExxonMobil touted its construction progress so far, emphasizing its hiring of Alaskans and Alaska contractors and its “commitment to Alaska’s energy future.”
ExxonMobil and its contractors employed more than 1,100 Alaskans during the winter work season, and more than 500 people worked on Point Thomson site development during the summer, the company said.
Airstrip, pier, camp and moreMore than 35 Alaska companies worked on the project in the summer, ExxonMobil said.
Alaska Frontier Constructors was involved in completing an airstrip and finishing construction of a service pier, the company said.
A permanent camp, providing meals and housing to project workers, was built and is now fully operational, ExxonMobil said. Point Thomson’s telecommunications and power systems also are fully operational.
Part of the project involves laying a new 22-mile insulated pipeline to tie Point Thomson into the existing North Slope oil transportation network.
Completion of the pipeline is expected this coming winter, ExxonMobil said. More than 2,200 vertical support members — rackets to support the above-ground pipeline — already have been installed.
Australian firm WorleyParsons, the primary engineering, procurement and construction management contractor for Point Thomson, recently awarded two subcontracts for the next major phases of development.
“CH2M Hill Alaska was awarded a subcontract for the installation of production system modules that make up the principal components of the permanent Point Thomson facilities,” ExxonMobil said. “CH2M Hill is partnering with ASRC Energy Services and Delta Construction on field work beginning in 2014.”
CH2M Hill Alaska also was awarded a subcontract to fabricate and install a standby power generation module, which will provide backup power for the entire facility in 2014, ExxonMobil said.
“These subcontracts will provide employment opportunities for many Alaska-based contractors,” the company said.
Cutting steelKaren Hagedorn, ExxonMobil’s Alaska production manager, discussed the Point Thomson project in a Compass column published Sept. 14 in the Anchorage Daily News.
“We’ve moved into our permanent work camp and we’re about to cut the steel to build modules that will handle up to 200 million cubic feet per day of natural gas,” Hagedorn wrote.
Neither the column, nor the ExxonMobil press release, said where the industrial modules will be built. In the past, major oil field modules have been built out of state, in Louisiana or elsewhere, then barged to the North Slope.
Hagedorn and ExxonMobil touted the potential for Point Thomson, and especially the new pipeline, to open the eastern North Slope frontier to additional exploration and development.
The pipeline will have a capacity for up to 70,000 barrels per day, far more than the modest 10,000 barrels of condensate ExxonMobil plans to produce to start.
Natural gas condensate is a form of light oil. ExxonMobil plans to produce the condensate by cycling gas to the surface. Liquids will be collected, and then the dry gas will be shot back underground for storage.
In her Compass piece, Hagedorn said a class of Point Thomson operators is now in training.
“We have also started gearing up for our next round of hiring this fall,” she wrote.
The state’s pressureDevelopment of Point Thomson has long been an important economic development goal for Alaska’s elected officials.
The field was discovered in the 1970s, but ExxonMobil didn’t develop it, citing its technical challenges and the lack of a North Slope natural gas pipeline.
Tired of waiting, the administration of former Gov. Frank Murkowski in 2005 began taking steps to dissolve the Point Thomson unit and underlying leases. This would spawn a heavyweight legal conflict, with succeeding governors Sarah Palin and Sean Parnell continuing the fight that Murkowski started.
The conflict had reached the Alaska Supreme Court when the state and the oil companies, on March 29, 2012, reached a settlement that closed the case and laid out a schedule for phased development at Point Thomson.
Now the first phase of development is proceeding. State officials have said if ExxonMobil and its partners don’t follow through, they will lose acreage.
The condensate signifies only a fraction of the Point Thomson’s value. The field holds an estimated at 8 trillion cubic feet of gas, or about a quarter of all the known gas reserves on the North Slope. If and when the state gets its long-sought trans-Alaska gas line, Point Thomson will be a major contributor to the project.