Vol. 5, No. 5 Week of May 28, 2000
Providing coverage of Alaska and northern Canada's oil and gas industry

BP Exploration (Alaska) gets what it needed done this winter

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In spite of late start due to weather, Greg Mattson tells Alliance, Northstar work ended up where it needed to be this winter, with pipelines, island in place

Kristen Nelson

PNA News Editor

By the end of April, the pipelines to Northstar were in place, hydrotested, pigged and filled with nitrogen, and sheet pile was being installed around Northstar island.

In spite of a two to three week delay in starting due to weather, BP Exploration (Alaska) Inc.’s Greg Mattson told the Alaska Support Industry Alliance April 28, the project ended up where it need to be by the end of the winter construction season. The project is now roughly half completed.

Mattson, BP Exploration (Alaska)’s new development business unit leader, said there was “a successful conclusion to everything we set out to do this past winter season” although, he said, we “came close at the end.”

The problem, he said, was unseasonably warm weather in January which delayed ice road construction. The fact that after a two-and-a-half to three week delay at startup the project finished about when planned is “a real testament to the excellent planning, communication, execution” by BP’s contract partners: Houston Contracting Co., pipeline construction; Alaska International Construction island construction and pipeline trenching; VECO Engineering infrastructure design; Alaska Petroleum Contractors structural steel fabrication; and VECO Construction module fabrication and North Slope installation.

Materials stockpiled on island

Work completed this winter included laying and back filling the pipeline from shore to the island, Mattson said. The pipelines — one to take oil to the trans-Alaska pipeline and one to bring in natural gas from Prudhoe Bay for injection — have been pressure tested and a geometric pig has been run through the line. The pipelines have both been filled with nitrogen for corrosion protection.

The island has been completed to the level it will be above sea level and sheet piling is being installed around the entire island face to make it ready for breakup. Materials are also being stockpiled on the island so that work can continue during breakup to get the island ready for the summer’s sea lift.

The module construction project is under way in Anchorage at the North Star Terminal, Mattson said. The modules will be the largest ever built in Anchorage. Components that could not be fabricated in Alaska are being sea lifted in from Louisiana and will be fitted into the modules, he said.

EOR from the beginning

Northstar will be the first BP field on the North Slope to have enhanced oil production from the beginning, Mattson said. They will be reinjecting all the gas from Northstar, but need more than the field can produce so gas will be brought in from the central gas facility at Prudhoe Bay. EOR provides an extra 5-10 percent recovery, he said, as well as tax incentives. Northstar is estimated to have a field life of 16 years.

“Basically, the earlier we get it in, the more we can actually recover in the relatively finite life of the field,” Mattson said.

Northstar was discovered by Shell in 1983 and six wells have been drilled into the field, which is Ivishak, a Prudhoe Bay equivalent, with good porosity and permeability.

“Oil quality is among the best on the North Slope — 42 API gravity. Very light, very high premium in terms of its quality — for those who know about the quality bank, they know that BP will get premium for its value to the refiners,” Mattson said.

Reserves at the field are estimated at 175 million barrels, “and we have the possibility for upsides in …reservoirs that are known in the area and exploitable from the island,” Mattson said.

First oil will be produced in November of 2001 with peak rates expected to be 65,000 barrels a day.

Project cost up from original estimates

The project cost is currently at $690 million, with $300 million of that being spent this year, Mattson said. That $300 million, he said, represents about one-half of BP’s Alaska 2000 capital budget. Northstar is one of the major projects going at BP at the moment, he said.

Originally approved by BP’s board in 1996 with anticipated first oil in 1999, the project has seen “about two years worth of delays associated with legal challenges; a longer than anticipated permit cycle; and we are still defending legal challenges against the permits that we have,” Mattson said.

The original amount sanctioned for the project was $405 million with contingency up to $450 million. The additional cost is probably a third to a half additional work in permit activity and a significant chunk of the money, he said, in “ramping down and ramping up” as the project was started and stopped and started up again.

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