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Vol. 23, No.35 Week of September 02, 2018
Providing coverage of Alaska and northern Canada's oil and gas industry

EIS is published

BOEM favors Hilcorp’s proposal to develop Liberty from offshore island

Alan Bailey

Petroleum News

The federal Bureau of Ocean Energy Management has issued a final Environmental Impact Statement for Hilcorp Alaska’s planned Liberty oil field development in the Beaufort Sea. The agency has confirmed a preferred alternative accepting Hilcorp’s proposal to develop the field from a small gravel island in 19 feet of water about five miles offshore, and the laying of a buried subsea pipe-in-pipe pipeline to carry crude oil to shore. The pipeline would connect with the existing Badami pipeline for transporting the Liberty oil to the trans-Alaska pipeline.

BOEM says that it anticipates the EIS being published in the Federal Register on Aug. 31, with a record of decision for the document being issued 30 days or more later.

Construction schedule

Hilcorp has previously said that it hopes to start building the 9.3-acre gravel island in late 2019, with the laying of the field’s subsea pipeline taking place during the following winter and first oil from the field perhaps flowing in 2022. The plan is to ultimately drill 16 wells, presumably a combination of production, injection and disposal wells.

Production would likely begin at a rate of 10,000 to 15,000 barrels per day, peaking at perhaps 60,000 to 70,000 bpd after about two years. Peak gas production is anticipated to be around 120 million cubic feet per day. Hilcorp thinks that the field holds around 120 million barrels of recoverable oil and field life is anticipated to be 15 to 20 years.

Production facilities on the island would deliver sales grade crude oil into the subsea pipeline for shipment to shore. Produced gas would be used for fuel on the island, for injection into the field’s reservoir and for gas lift in production wells. Treated seawater mixed with produced water would also be injected into the reservoir for pressure maintenance.

A mine site west of the Kadleroshilik River would act as source of gravel for the construction project. Winter construction activities would require four ice roads and three ice pads. Gravel would be moved by ice road for island construction during the winter. Large equipment, such as the drilling rig, would be delivered by barge to the island in the summer. Hilcorp expects to be able to truck most of the modules, buildings and materials to the North Slope, for shipment from Prudhoe Bay West Dock, or from the Endicott island. However, some equipment may be shipped by barge from Dutch Harbor.

Other options considered

The EIS considers other development options, including a couple of alternative possible locations for the production island, and the possibility of installing field processing facilities on the Endicott satellite drilling island, rather than on Liberty island. The EIS dismisses as technically and economically infeasible an option involving ultra-extended reach drilling from the Endicott island, an option that BP had proposed in 2005. A “no action” alternative would eliminate the economic benefit to be gained from developing the field.

The Boulder Patch, a seabed feature of considerable environmental significance, played a role in assessing the potential environmental impacts of some options. Although the proposed plan places the artificial island outside the Boulder Patch, alternative island locations could move the island farther from the environmentally sensitive area. But these options would raise other issues. One option, for example, would place the subsea oil export pipeline in an area susceptible to seafloor scouring associated with the nearby Kadleroshilik River delta.

Discovered by Shell

Shell Oil Co. discovered oil in the area of the Liberty field between 1982 and 1987, through the drilling of four wells into the Kekiktuk formation from two artificial gravel islands. The Kekiktuk is the reservoir rock for the Endicott oil field to the northwest. In 1997 BP confirmed the existence of the field through the drilling of the Liberty No. 1 exploration well.

In 1998 BP proposed developing the field from an artificial gravel island. However, in 2001 the company re-evaluated that plan and, in 2005, came up instead with its plan to develop the field using ultra-extended reach drilling from Endicott. The company moved ahead with that plan, expanded the Endicott satellite island and installed a purpose-built drilling rig for the project. However, following technical problems and some issues relating to the Deepwater Horizon disaster, the company cancelled the project in 2012.

In 2014 BP sold 50 percent ownership of the field to Hilcorp. Hilcorp became field operator and has since moved ahead with planning the development of the field along similar lines to BP’s original 1998 concept.

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