It took several months of negotiation, but ConocoPhillips and Kuukpik Corp., the village corporation for the community of Nuiqsut on Alaska’s North Slope, have reached an agreement on the location for a bridge to carry an oil pipeline and a road across the Nigliq channel of the Colville River, to hook the planned Alpine West satellite oil field in the northeast corner of the National Petroleum Reserve-Alaska into the Alpine oil field production facilities.
Characterized as a win-win situation by both ConocoPhillips and Kuukpik, the agreement opens the way for the development of a series of Alpine satellite fields in NPR-A, while also enabling road access for Nuiqsut villagers both to the Alpine field and to hunting grounds west of the village.
The new agreement encompasses the planned development of the Lookout and Rendezvous satellites in the Mooses Tooth unit of northeast NPR-A, and the Fiord West satellite on state land to the north of the Alpine field, as well as the development of Alpine West.
Nigliq channelThe Nigliq Channel, one of the major channels in the Colville River delta, to the west of Prudhoe Bay, splits off from the main Colville River channel a few miles east of Nuiqsut, some 16 miles upriver from the Beaufort Sea coast.
The main branch of the river flows northeast to the sea, while the Nigliq Channel flows north, leaving a broad triangle of land crisscrossed by other smaller channels between those two main channels. The Alpine CD-1 well pad, with the field production facilities, lies near the center of that land triangle, separated from the other North Slope oil facilities to the east by the main river channel — the Alpine facilities can only be accessed by air or by ice road in the winter.
The Alpine field and its satellites are jointly owned by ConocoPhillips and Anadarko Petroleum, and are operated by ConocoPhillips.
An environmental impact statement published in 2004 for the development of several Alpine satellite fields, among them Alpine West, included as part of its preferred alternative a road crossing the Nigliq Channel at a point almost due west of the Alpine facilities. The proposed road route followed an approximately straight line from Alpine past the CD-2 pad to CD-5, the well pad location for the Alpine West satellite, the first of the satellites in NPR-A slated for development. From CD-5 the road would eventually continue southwest to connect with other satellite fields in the Mooses Tooth unit.
But the Nuiqsut community objected to the planned bridge across the Nigliq channel.
“The problem … was that it would have gone right through the heart of the main subsistence fishing area for the local community,” Lanston Chinn, manager of Kuukpik Corp., told Petroleum News.
And, as well as being concerned about possible impacts on subsistence fishing, the locals were worried about the potential for the bridge to cause ice dams in the river, Helen Harding, ConocoPhillips vice president for North Slope Operations and Development, said.
Directional drillingThe pipeline connecting Alpine West to the Alpine facilities would cross the planned bridge.
Harding said that Nuiqsut residents would have preferred that the oil pipeline be placed under the river using horizontal directional drilling, a technique that had been used to pass the export oil line from the Alpine field under the main branch of the Colville River. But, whereas a complete set of production facilities in the Alpine field delivers processed crude oil into the Alpine export pipeline, the satellites are modest in size and require their raw products consisting of oil, water and natural gas to be piped to the Alpine facilities for processing.
“These are satellites that are too small to be standalone,” Harding said.
And a directional drilling solution, although technically feasible, would have proved an extremely expensive option, especially given the fact that the pipeline would carry the unprocessed three-phase fluid — in 2005 ConocoPhillips told the U.S. Army Corps of Engineers that the use of a buried river crossing for a three-phase pipeline was an unproven concept that posed risks associated with pipeline corrosion and paraffin clogging.
In addition, a roadless development at a satellite like Alpine West would require an airstrip, involving the use of substantial amounts of gravel for construction.
“It’s like everything. There are pros and cons to all alternatives,” Harding said.
Ground to a haltBy early 2008 negotiations over the bridge and road plans between ConocoPhillips and Kuukpik, the owner of surface land around Nuiqsut, had ground to a halt. So Harding, new to Alaska in January of that year and anxious to take a fresh look at the Nigliq bridge problem, set about re-establishing relationships with the village corporation, to seek a way around the impasse.
Negotiations restarted in the spring and resulted in December 2008 in an agreement that the required bridge would be built near the CD-4 pad, several miles south of the originally planned bridge location, a solution that would place the bridge at a point where the channel banks are relatively high and firm, while avoiding the conflicts with subsistence fishing, Harding said.
“Ultimately we were able to work things out with ConocoPhillips over the bridge location,” Chinn said.
And, based on local advice, ConocoPhillips has agreed to some design changes to the Nigliq bridge in its new location, with the 1,400-foot-long structure now planned to stand 20 feet above the water, with a maximum span width of 200 feet over the deepest part of the channel, thus avoiding interference with boat traffic. To accommodate wider spans, the bridge is now designed for lighter loads than previously, although the increased bridge size at the new location will increase the construction costs, Harding said.
As well as ensuring that the new bridge design incorporates sufficient clearance for boats, Kuukpik made sure that the design adequately allows for the possibility of ice blockages caused by the bridge piers, Chinn said.
The road route as now planned runs south from the Alpine field before turning north toward CD-5 after crossing the bridge, thus following a course substantially to the south of the originally planned route and requiring two additional small river channel crossings.
Village roadAs part of the settlement with Kuukpik, ConocoPhillips has agreed to fund the construction of a road that Kuukpik will build to Nuiqsut from the CD-5 road. The village road will enable villagers to drive from Nuiqsut to the Alpine central facilities, as well as to hunting grounds in the Fish Creek area to the west of the village. And, with the possibility of villagers being able to drive to Alpine year round, ConocoPhillips is revamping its employment and contracting strategies for local hire, Harding said.
Chinn said the concept of a road from Nuiqsut to Alpine, to enable access to the field facilities for local employees, dates back to the era when ARCO originally developed the Alpine field — with the concept now coming to fruition, Kuukpik will ensure that some young people are trained for employment in the field, he said.
“We’ve made a pledge to do that,” Chinn said. “… (The road) opens a door to enable people from Nuiqsut to be able to travel to work and back.”
Chinn also said that with oil development now starting to move into NPR-A, west of the Colville River delta, Kuukpik is interested in the possibility of establishing a supply base on Kuukpik land to the west of Nuiqsut. That could lessen the industrial impact on the environmentally sensitive delta, he said.
Moving aheadMeantime, with the bridge issue settled, ConocoPhillips plans to move ahead with its $500 million Alpine West development at CD-5.
“We’re expecting to start up in late 2012 and we’re hoping to get our permits by the middle of this year. … We have to have our permits before we go to corporate sanction,” Harding said.
Assuming corporate approval of the project, construction would start in the winter of 2010-11 and continue in the following winter, leading to development drilling in 2012. And, depending on what happens to factors such as oil prices, ConocoPhillips would like to start work sequentially on its other new Alpine satellites, thus optimizing the organization and logistics of the required construction work and enabling satellites to come online one year at a time, Harding said.
ConocoPhillips spokeswoman Natalie Lowman said that the current low oil prices are impacting the development of relatively low-value heavy oil but are not hindering development of the higher-value light oil in the Alpine satellites.
“We have said that we’re going to continue to pursue the higher-margin light oil projects, and that’s what we see here,” Lowman said.
And Chinn reflected on Kuukpik’s negotiations with ConocoPhillips.
“We can be the kid on the outside of the candy story banging on the window” or we can become part of the process, he said.
The local community seeks solutions to problems and tries to find win-win situations, he said.
“It’s been a long, interesting road,” Chinn said. “… It’s a question of people being able to sit down and work things out.”