Vol. 26, No.31 Week of August 01, 2021
Providing coverage of Alaska and northern Canada's oil and gas industry

State of Alaska grants OSA’s Pikka development road easement

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Kay Cashman

Petroleum News

On July 26, Alaska’s Division of Oil and Gas approved Oil Search Alaska’s request to modify the existing ADL 421218 private easement for the Pikka Development Access Road, formerly known as the Nanushuk Project Access Road, located on state land on the North Slope. It is yet another step forward in OSA’s Pikka development plans.

The decision, signed by Director Tom Stokes, authorizes only the modifications described in OSA’s May 11 application, asking that the easement acreage be increased in four areas adjacent to the Pikka Development Access Road by altering the footprint of the pump house pad at Lake MC7903, adding two valve pads on the north side of the access road and adding the East Miluveach Pipeline Crossing on the access road near the Mustang road.

The construction easement will increase by 12.2 acres for a total of 658.2 acres, and the operational easement will increase by 6.8 acres for a total of 215.7 acres.

The easement modifications are on oil and gas leases held by Mustang Holding and OSA and are consequently contingent upon reasonable access to State of Alaska surface lands adjacent to OSA’s Pikka unit and Mustang’s Southern Miluveach unit lease boundaries.

Surface activities will occur on Mustang leases ADLs 390691 and 390692 and OSA lease ADL 392964.

Per OSA’s application, the components will be constructed during the winter using ice roads and existing gravel roads.

The project access road was built in the winter of 2019-20. The access road, operations pad, processing facility pad and the ND-B drill site are also in place.

OSA asked to increase the easement for the remaining components of the project that aren’t covered in the previously authorized Pikka Development Access Road approval.

The construction start date is listed in OSA’s application as Nov. 1 with a potential finish date of Dec. 31, 2023.

Decision and finding

The division, which is part of the Alaska Department of Natural Resources, or DNR, found that the easement modification was “necessary for the practicable development and production of the OSA's Pikka unit resources” and that granting the easement modification “makes the land available for the maximum use and benefit consistent with the public interest.”

The easement modification will be authorized under AS 38.05.850, with the division updating the previously issued entry authorization, or EA, to reflect the increase in acreage pursuant to AS 38.05.850.

OSA must meet the requirements of the EA before the easement will be granted, the decision said.

During the term of the EA, periodic inspections may be conducted at the discretion of DNR to ensure compliance.

Survey and usage fees

OSA must submit an as-built survey “acceptable to the standards of the division prior to the expiration of the EA. The as-built survey will include surface infrastructure (road, pump house pad, NPF, and NOP) over state surface and submerged lands within Southern Miluveach and Kuparuk River unit and non-unitized leases. Survey instructions must be obtained from the DNR Survey Section,” the decision said, adding “advance planning facilitates the survey process, saving time and money for both the state and the grantee. Therefore, the division recommends coordination with the DNR Survey Section prior to beginning construction on state land.”

Finally, a draft of the project as built must be submitted to the DNR Survey Section prior to expiration of any EA issued by the division for ADL 421218 and must be approved by the division before issuance of the final easement document, the decision said.

Annual fees for a private non-exclusive easement are subject to 11 AAC 05.070(d)(2) and the Division of Mining Land & Water director’s fee order #3, which is $240 per acre, per year.

The EA authorization for construction and survey activities within the road easement will be updated to reflect the 12.2-acre increase, resulting in a total authorization of 658.2 acres. OSA will be charged an annual fee of approximately $157,968.00 for the term of the EA and any extensions to the EA, in accordance with 11 AAC 05.070(d)(2), the decision said.

Upon completion of construction and survey activities in accordance with the director’s decision and all terms and conditions of the EA, a 215.7-acre private non-exclusive easement will be issued for the road for operation and maintenance of the infrastructure.

No agency, public response

The project description was circulated for agency review on May 25 through June 8. No comments were received.

Public notice and solicitation of comments for the road easement application has appeared in the DNR Public Notices and Division websites; the Barrow, Nuiqsut, and Deadhorse Post Offices on June 14, the Arctic Sounder on June 17 and 24; and the Anchorage Daily News on June 14 and 21, with a comment deadline of July 14. No comments were received.


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