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Division of Oil and Gas authorizes easement for 21.6-mile Pikka pipeline system
Kristen Nelson Petroleum News
Alaska Division of Oil and Gas Director Tom Stokes has approved a pipeline system easement for Oil Search Alaska’s Pikka development. Oil Search Alaska, OSA, operator of the Pikka unit, applied to the division in October for an easement to construct and operate a 21.6-mile pipeline system connecting planned drilling operations in the Pikka unit with other Oil Search facilities and existing infrastructure on the North Slope.
Oil Search merged with Santos in December and is now part of the Santos Group.
The division recently approved OSA’s 2021 Pikka unit plan of development (see story in Jan. 3, 2022, issue of Petroleum News).
Pikka, a 77,744-acre unit west of the central North Slope, is expected to begin phase 1 oil production in 2025, quickly reaching 80,000 barrels a day. Most recently Oil Search increased its Pikka/Horseshoe area recoverable contingent oil reserves by approximately 500,000 barrels to nearly a billion barrels.
A recent paper on Pikka (see story in Dec. 19, 2021, issue of Petroleum News) cites reservoir modeling which indicates some 3,218 million barrels of oil in the planned phase 1 Pikka development, with recoverable resources in the range of 800 million to 900 million barrels. Over the entire field, original oil in place is estimated at 9.7 billion to 14.8 billion barrels, with recoverable oil in the 1.9 billion to 4.4 billion barrel range.
In the Jan. 6 pipeline system easement decision, Stokes said the division finds the proposed easement “necessary for the practicable development and production” of Pikka unit resources and has granted an entry authorization, good for five years, for “a private, non-exclusive easement to OSA for the pipeline supports, seawater pipeline, fuel pipeline, power and fiber-optic cables, and infield pipelines extending beyond” the Pikka unit. Once the terms and conditions of the entry authorization have been met by Oil Search, the term of the easement will be 35 years from the date of the decision.
There is a 20-day appeal period.
Easement description In the decision Stokes said the pipeline system would be on state land outside the Pikka unit boundary, with the easement starting at the planned OSA tie-in pad near Central Processing Facility 2 in the Kuparuk River unit, operated by ConocoPhillips Alaska, and continuing west through the Southern Miluveach unit operated by Mustang Holdings LLC to the Pikka unit.
During construction the easement would include some 700 acres, scaling back to approximately 261 acres during operations, with the construction easement 300 feet wide and the operational easement 100 feet wide, except at the tundra pad pipeline crossing.
“The easement, which includes pipeline supports, a 16-inch seawater pipeline, an 8-inch fuel gas pipeline, power and fiber-optic cables, and infield pipeline that are outside of the PKU boundary, will collectively be referred to as the Pipeline System. A sales oil pipeline will be located within this easement,” Stokes said, but will be separately adjudicated by the division.
“The purpose of the project is to provide a power and fiber-optic connection and facilitate the transportation of liquids and gas to optimize production efficiency in the PKU,” he said.
The pipeline system will include installation of vertical support members and horizontal support members, installation of pipelines and cables, trenching, excavation, placement of gravel fill and construction of ice roads and pads, with construction to occur over two winter and summer seasons and use existing gravel roads and pads, as well as constructed ice roads and pads for easement access, staging and storage.
Stokes said the pipeline system will parallel the Pikka Access Road, the Mustang Road and the Spine Road until it connects with the Seawater Treatment Plant pipelines and existing infrastructure near CPF2.
Segments The first segment of the pipeline system starts at the tie-in pad near CPF2 and continues to the Nanushuk Processing Facility, including the 8-inch fuel gas pipeline, the 16-inch seawater pipeline and the 16-inch sales pipeline (to be adjudicated separately). It also includes a pipeline crossing under the Miluveach River and a tundra pad pipeline crossing to allow access to Lake K210 during winter. There would also be two road pipeline crossings to accommodate the access roads to KRU drill sites 2A and 2V.
At the Nanushuk Operations Pad the power and fiber-optic cables will join the pipeline system, allowing power produced at the Nanushuk Processing Facility to be distributed to the operations pad and ND B.
Two sectionalized cabinets will house electrical and fiber-optic switchgear, allowing maintenance crews to isolate the utility for maintenance purposes; these could also be used as a splice point for future activities. The cabinets will be adjacent to gravel pads at the operations and processing facilities on tundra within the proposed easement.
The final segment of the pipeline system will start at the processing facility and continue to the Pikka unit and will include power and fiber-optic cables as well as continuation of the infield pipelines extending beyond the unit, with infield pipelines including a gas injection pipeline, a gas lift pipeline, a multiphase fluid pipeline and a water injection pipeline.
Conflicts and pending interests Stokes said the easement will be within the Kuparuk River and Southern Miluveach units on active oil and gas leases assigned to ConocoPhillips Alaska and Mustang Holdings LLC and is also near the Kuparuk Transportation Co. pipeline right of way.
“OSA has engaged KTC and will continue to coordinate activities to avoid any unreasonable interference with existing operations in the vicinity of the proposed pipeline system,” he said. OSA is negotiating an interconnect agreement with KTC for the sales oil pipeline.
“The Division requires that activities authorized under the EA and easement are conducted in a manner that avoids unnecessary or unreasonable interference with KRU and SMU operations,” Stokes said.
Access will be through existing KRU and SMU infrastructure and oilfield roads, “regulated by security checkpoints in Deadhorse, and under agreements for the use of these improvements with others. The Division does not authorize use of those other improvements,” Stokes said.
Agency and public comments on the easement application were sought by the division and it received no comments.
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