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Vol. 22, No. 37 Week of September 10, 2017
Providing coverage of Alaska and northern Canada's oil and gas industry

Nanushuk draft EIS out

Armstrong Energy project would produce 120,000 bpd from area west of Kuparuk

Kristen Nelson

Petroleum News

Armstrong Energy LLC’s plan to develop the Nanushuk project within its North Slope Pikka unit reached a regulatory milestone Sept. 1 when the U.S. Army Corps of Engineers, the lead agency for the project, issued a draft environmental impact statement. That initiates a public comment period on the draft EIS which closes Oct. 16. Public meetings on the draft EIS have been scheduled for Sept. 25 in Nuiqsut, Sept. 27 in Utqiagvik, Oct. 3 in Fairbanks and Oct. 4 in Fairbanks. For details see the project EIS website at www.NanushukEIS.com. A final EIS is expected in 2018.

Nanushuk is a project of Armstrong and its partner Repsol to develop oil discovered in the Pikka unit on the North Slope between Kuparuk and the Colville River unit. Production is estimated at 120,000 barrels per day.

A final EIS and a record of decision, and project permits, are required before construction can begin on the project.

Armstrong President Bill Armstrong told Petroleum News Sept. 5 the company is moving forward as planned with production to begin in 2021.

Three drill sites

The proposal is for development from three drill sites east of the Colville River. Drill Site 1 is also the site of the central processing facility; the other two drill sites are standalone sites.

The three drill sites will accommodate as many as 146 production and injection wells, 32 at Drill Site 1, 60 at Drill Site 2 and 54 at Drill Site 3. Each drill site will include an additional well slot to accommodate a Class 1 underground injection control disposal well.

Armstrong’s project development plan shows construction beginning in the fourth quarter of 2018 and ending in the third quarter of 2022, with drilling activities beginning in 2021, and including as many as three rigs drilling for up to 15 years. The first rig would be mobilized to the site as soon as gravel compaction is achieved, with the number of rigs subject to market conditions and rig availability on the North Slope.

The Corps said Armstrong identified three drill site locations which allowed access to the Alpine C and Nanushuk reservoirs, and while alternative drill site locations were examined, they were eliminated because of technical limitations posed by drilling and resource development strategy. The alternatives considered in the draft EIS (other than the no action alternative under which the Corps would not issue permits) are all based on the same drill sites with focus in the EIS on ways to minimize effects of accessing the project area.

Roadless options eliminated

Other alternatives considered but rejected include various forms of a roadless project, rejected because they would substantially increase the project footprint, add air traffic with the potential to increase impacts to subsistence users and wildlife, and create more adverse effects in terms of spill detection and response.

The Corps said the roadless alternatives were ultimately rejected “because they do not have the potential to result in less adverse environmental effects.”

When the Bureau of Land Management analyzed a roadless alternative for Greater Mooses Tooth, it found “roadless alternatives would have the greatest impact to subsistence users and activities of all the action alternatives,” the Corps said, in particular adding to air traffic.

Several of the roadless alternatives would have had larger footprints because of the need for new airstrips or roads to existing airstrips, “and because the export pipeline would not include parallel roadways, all roadless options introduce operational complexity and operational risk, and the potential for more adverse effects in terms of spill detection and spill response.”

Use of reclaimed gravel from abandoned pads, roads and airstrips was considered, but the quantity of such material is limited and unlikely to meet project needs, many abandoned projects are beyond reasonable distance for hauling and the quality of material at abandoned sites is unknown and has the potential to be contaminated from previous activities.

Drill site options

Drilling from existing pads at Alpine (CD1 or CD4) was considered but the Corps said the option was not technologically feasible because extended reach drilling of more than 45,000 feet would have been required and because use of another operator’s pad was not logistically feasible.

Use of only one or two drill sites was considered, but eliminated because of the same limits on ERD for distances which would have been greater than 45,000 feet to produce target resources. The state requires development of resources to the maximum extent possible, the Corps said, which would not have been possible with one or two pads, or by relocating one of the drill sites farther east.

The longest existing ERD well on the North Slope is some 26,000 total feet, the Corps said, and “development of the relatively shallow reservoirs targeted by the Project (approximately 4,000 to 7,000 vertical feet deep) would involve heavy torque and drag loads during drilling and completion of the wells, further resulting in shorter overreach capabilities.”

Shared facilities

The proposal includes pipelines to carry processed oil to a junction with the Kuparuk Pipeline, and one option considered was use of the existing Alpine pipeline, but analysis found that line had insufficient capacity for Nanushuk oil. That option would also have required construction of a line across the Colville River to connect with the Alpine pipeline.

Use of the existing Alpine central processing facility or the existing Kuparuk CPF2 was evaluated, but the Alpine facility did not have sufficient capacity to meet the project’s needs and the Kuparuk facility was at or near capacity limits for gas treating and gas compression, produced water, water injection and total inlet fluids, as well as electrical production.

Use of the proposed Mustang and Placer central processing facilities was also considered, but Mustang has not been constructed and, the Corps said, future construction is not certain; the Placer processing facility has not been formally proposed and construction is not certain.

Alternatives

While the drill site locations are common to all alternatives - except the no action alternative - the central processing facility location varies by alternative. The CPF would include processing and utilities modules with multiphase product from the three drill sites transported to the CPF for processing with the CPF capable of processing some 120,000 bpd. Water separated from the crude oil would be reinjected while natural gas would be used for fuel at the CPF with the remainder transported back to the drill sites for gas lift.

Processing facilities at the CPF would be a combination of truckable and sealift modules.

The operations center pad would include a 200-bed operations camp; office, warehouse and maintenance buildings; warm and cold storage buildings; water/wastewater treatment plants and temporary waste storage areas; communication structures; diesel-fired back-up power generation and fuel storage; a helipad; and a disposal well.

Alternative 1 is the no action alternative; alternative 2 is the Armstrong proposal.

Alternative 3, southern access, would use the existing Mustang Road; the CPF and operations center would be moved south and west of Armstrong’s proposed sites.

Alternative 4, northern access, would use existed and permitted but not yet constructed Nuna roads; the CPF and operations center would be moved east of Armstrong’s proposed sites.

Alternative 5 would reconfigure infield roads; the CPF and operations center would be south and east of Armstrong’s proposed sites.



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