Agency decision takes Oil Search step closer to Pikka STP approval
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Kay Cashman Petroleum News
On July 20 Tom Stokes, director of the Alaska Department of Natural Resources’ Division of Oil and Gas, issued a proposed determination on a combined Pikka seawater treatment plant and make-up water and gas lines easement, bringing Oil Search Alaska a little closer to final division approval of its big North Slope development.
The seawater treatment plant and related pipelines will provide a reliable and predictable supply of make-up water of sufficient quantity and quality to bolster hydrocarbon extraction efficiency from Pikka unit reservoirs, which include the massive Nanushuk reservoir.
On June 23, 2020, Oil Search Alaska, a subsidiary of Oil Search Ltd. and operator of the Pikka unit, applied for an easement under AS 38.05.850 to construct and operate a seawater treatment plant, or STP, within the North Slope Borough on the eastern shore of Oliktok Point as a part of the Pikka development project.
Oil Search Alaska, or OSA, submitted a second easement application in August of that year to construct and operate a 20-inch make-up water pipeline, a 12-inch fuel gas pipeline and a fiber optic cable, collectively referred to as pipeline infrastructure.
The pipeline infrastructure, the division said in its proposed determination, will “facilitate the transport of treated seawater from the STP to a tie-in pad approximately 18 miles south of Oliktok Point.”
The proposed easements are in the ConocoPhillips-operated Kuparuk River unit.
On Dec. 18, the division issued a conditional easement for the STP, subsequently revising the easement on Jan. 28. On April 5, the division issued a conditional easement for the pipeline infrastructure. Both decision documents for the conditional easements required OSA to submit additional project information as it became available and prior to receiving final approvals to construct and operate the facilities.
The reason for Stokes issuing a proposed director’s determination was to summarize the agency’s analysis of the additional information previously requested of OSA in the conditional easements prior to entering the next phase for the two projects.
STP to be built off-site The STP will be constructed off-site on a submersible barge and transported to the North Slope via sealift during the open water season. Upon arrival, the barge will be positioned on the east side of Oliktok Point and ballasted down to rest on the ocean floor. Gravel fill will be discharged over the area surrounding the barge and contained with sheet piling. Screeding of the seafloor will occur initially during the open water season when the STP arrives on location and later during maintenance.
The STP will be equipped with a seawater intake structure, filtration system, power generation and heating system and will be fully functional following connection to the yet-to-be constructed communications systems, fuel gas and seawater pipelines.
The proposed dimension of the surface area of the gravel pad and STP barge is 6.83 acres. The initial construction easement will consist of 30.3 acres. The operational easement will consist of 13.0 acres, including buffers.
STP lines, fiber optic The 16-inch seawater pipeline, 6-to-12-inch fuel gas pipelines and fiber optic cable will be placed on new horizontal support members, or HSMs, and will require approximately 2,115 new 12-to-20-inch-diameter vertical support members, or VSMs, spaced 55 to 65 feet apart, per the director’s proposed determination.
The first 0.2 miles of piping will be placed below existing gravel fill and stretch from the east side of Oliktok Point to Eni’s Oliktok production pad. From there it will run above ground, generally parallel to and within 500 feet of the existing Nikaitchuq pipeline, Oliktok road and Kuparuk road.
The STP pipelines project is expected to require a 626.6-acre construction easement and a 221.18-acre final operation easement once fully constructed.
The pipelines will be centered on the VSMs along the pipeline alignment route. The construction easement will be 300 feet wide and the operation easement will be 100 feet wide, with a few exceptions around existing obstacles.
Construction activities for the project will include driving sheet piles; driving piles; trenching; excavating; placing gravel fill; screeding; installing VSMs, pipelines and fiber optic cable; and constructing ice roads and pads.
Pipeline construction will take place using ice roads and existing gravel roads for the 2022-23 and 2023-24 winter and summer construction seasons.
VSM locations will be surveyed and drilled in the winter, followed by installation into the pre-drilled holes using approximately three to six cubic yards of sand slurry per VSM, resulting in discharges to a total of 0.05 acres of jurisdictional waters of the U.S.
The minimum embedment for VSMs will be 15 feet in depth or to enough depth to ensure pipeline construction and operation safety, including potential frost jacking, consistent with North Slope best management practices.
VSM drilling will occur from ice roads. Pipelines will be placed during the following winter season, with testing and startup activities occurring in the second summer construction season.
Prior authorizations Prior authorizations granted for the STP project were as follows:
* ADL 421488 - STP easement director’s decision and entry authorization, approved Dec. 18 and revised Jan. 28.
* ADL 421526 - Pipelines and fiber optic cable easement director’s decision and entry authorization, approved April 5.
* ADL 421348 - Tie-in pad easement director’s decision and entry authorization, approved June 16.
Process hazard analysis The three director’s decisions on the STP project all required OSA to submit more detailed information on the project prior to starting construction. The information included reasonably foreseeable cumulative impacts on the Oliktok Point area and more detailed engineering documents.
OSA submitted a cumulative impact assessment, a schedule for the Pikka development, a fabrication and construction execution plan, a conceptual design basis, equipment lists and arrangements, and process descriptions.
Due to “timing, safety, and other considerations,” the division determined a process hazard analysis was “warranted to provide assurance throughout the public process of the applicant’s commitment to deliver a safe and operable new STP facility.”
Collectively, the division said, the cumulative impact assessment, process hazard analysis, and supporting data allowed it to further analyze the potential impacts of the project and summarize its analysis in its July 20 proposed determination.
However, the STP and pipeline infrastructure projects will not be fully sanctioned until a public process is completed and a front-end engineering and design, or FEED. package is reviewed and accepted by the division.
Process hazard analysis The process hazard analysis, or PHA, is a documented plan of how to minimize risks and improve safety through engineering and administrative measures to the previous defined plans using best available technology.
The division received a PHA report from OSA on June 23.
The division said the analysis was conducted in compliance with the expectations and regulatory premise outlined in the Occupational Safety and Health Administration’s regulation on process safety management of highly hazardous chemicals, which dictates requirements for preventing or minimizing the consequences of catastrophic releases of toxic, reactive, flammable or explosive chemicals.
The division said the scenario-based review was performed by a third-party consultant trained in applying structured and systematic methods to identify risks and consequences for the new STP operations.
The processes identified for the STP project included seawater intake, filtration, heating, deaeration, chemical treatment and transport through the pipelines. Utility and chemical systems processes were also discussed.
Division’s conclusion The division said it reviewed the supporting documentation provided by OSA and considered the reasonably foreseeable impacts that could occur through the life of the STP project.
Based on the information provided by OSA, a review of documents and case-file records, and the analysis presented in its determination on the division’s website, the director “proposes to approve the construction of the STP project” and recommended the following actions be taken:
1. The division shall solicit written comments and provide for public notice regarding its determination. To solicit public comments, the agency will place public notices in newspapers of general circulation (Anchorage Daily News and Arctic Sounder). The public notices will be posted in the state of Alaska Online Notice System and the division newsroom, and in post offices in Barrow, Deadhorse, and Nuiqsut.
2. Following completion of the public comment period, and consideration of all comments received, the director will make a final determination on whether the construction of the STP and pipeline infrastructure projects are in the state’s interest. As part of its decision, the director will analyze whether OSA is in compliance with all requirements from the division’s three decisions. Assuming the director concludes the project is in the state’s best interest, the director will issue to OSA a notice to proceed “containing specific terms and conditions necessary to protect the state’s interest.”
- KAY CASHMAN
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