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Vol. 24, No.40 Week of October 06, 2019
Providing coverage of Alaska and northern Canada's oil and gas industry

Pikka evolves

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Oil Search using Kuparuk for first oil, hopes to bump early output to 50,000 bpd

Kay Cashman

Petroleum News

A flurry of new stakeholder documents and a filing with the state of Alaska paint a picture of continuous evolution in Oil Search’s North Slope Pikka development.

Basically, it consists of three drill sites, a processing facility, an operations pad, a tie-in pad, infield pipelines, export and import pipelines, an access road, infield roads, a boat ramp and a potable water system.

The most recent major project change is that Pikka will start production early, in mid-2022, with 30,000 barrels of oil per day processed at ConocoPhillips’s nearby Kuparuk River unit.

Once Oil Search’s processing facility “is operational in 2023 or 2024,” the early production phase will end and the Nanushuk export pipeline will transition from carrying sales quality oil to Kuparuk central processing facility 2 and instead begin transporting it to the Nanushuk facility, which will have a capacity of handling 120,000 barrels of oil per day.

Note, the Pikka unit development is referred to as the Nanushuk development or project in state and federal paperwork, even though it will initially target oil deposits in both the Nanushuk and Alpine C reservoirs - two of six stacked plays in the unit that might eventually be tapped. This explains the pad names, which begin with ND, as well as the names of other project components, such as the Nanushuk processing facility, or NPF.

Data released during a Sept. 23-25 Oil Search investor tour of its Anchorage office and the North Slope reveal that the company’s Alaska team through a value engineering process is looking to increase early production to 50,000 bpd, as well as increase the nameplate size of the Pikka project to 135,000 bpd. (The process of value engineering involves brainstorming ways to reduce initial or lifecycle costs while still maximizing function and maintaining safety and environmental standards. So far, the team has evaluated 86 different ideas.)

Primary changes

In the Sept. 26 modifications to the Pikka plan of development filed with the Alaska Department of Natural Resources’ Division of Oil and Gas, Oil Search says early production will come from the ND-B pad.

“Multi-phase fluids from ND-B will be transported for processing at Kuparuk CPF2 via the 24-inch multiphase pipeline to the NPF, and the 18-inch Nanushuk export pipeline from the NPF to Kuparuk CPF2.”

The changes requested in the filing are “based on local community input” and “enhance engineering operational efficiency,” Oil Search says.

Other project alterations proposed by the company involve the following:

1. Modify the ND-B pad layout.

2. Relocate the tie-in pad and modify its layout.

3. Modify the water source access road and pump house pad.

4. Update road and pad footprint and fill volumes by about 0.2 acre and a net increase in total fill volume of approximately 5,000 cubic yards.

5. Relocate the boat ramp and associated boat ramp access road.

6. Implement early production.

ND-B pad modifications

Regarding the ND-B pad modifications, Oil Search wants to change its size and layout to accommodate the newly designed grind and inject facility, which will reduce the gravel footprint on the west and south sides of the pad and increase it on the east side.

The modified pad will be 20.8 acres, an increase of 1.3 acres from the previously proposed 19.5-acre pad.

Oil Search originally planned to construct underground injection control, or UIC, wells at each drill site within the well row. These wells were only capable of handling waste generated from the respective well pad. In October 2018, Oil Search reduced the overall number and location of UIC wells and relocated them to ND-B. In order to maintain disposal well sustainability with the reduced number of UIC wells, the company designed the grind and inject facility at ND-B to handle all drilling and operational wastes, including waste deliveries from ND-A and ND-C; hence the changes to ND-B.

The increased gravel footprint on the east side of ND-B will allow the grind and inject facility to be moved away from drilling and production operations to separate traffic having to do with processing and fracturing equipment, pipelines, and drill rigs “as recommended by detailed facility siting reviews and advanced engineering,” all of which will reduce overall drill site congestion and enhance safety, Oil Search says.

Tie-in pad, boat ramp changes

The tie-in pad relocation from near the Kuparuk River unit 2C pad to northeast of the Kuparuk central processing facility 2, or CPF2, is based on a request from ConocoPhillips, Oil Search says.

The new location will reduce the project pipeline length by 1 mile, including re-routing the pipeline “north of Lake K213/M8103 and eliminating two pipeline-road crossings.”

The tie-in pad size will increase from 0.8 to 0.9 acre to accommodate access to existing powerlines, a telecom tower, and space for additional equipment during project development and production.

Oil Search’s proposal to move the boat ramp and its access road from the permitted location on the Kachemach River, west of ND-B, to north of ND-B on the Colville River was requested by the Nuiqsut community, who will be using both to launch and retrieve boats. The new location will give subsistence users direct access to the east channel of the Colville.

Water source road, pump house pad

Oil Search also proposes to change the permitted pump house pad location and realign the water source access road.

The modification will result in an overall increase in footprint from 2.2 acres (1.1- acre pad and 1.1-acre road) to 2.5 acres (1.1-acre pad and 1.4-acre road), an increase of approximately 0.3 acre, the company says.

The new pad location, approximately 500 feet west of the original site, will “improve access to a deeper portion of Lake MC7903 and provide more consistent access to unfrozen water during the winter,” Oil Search says.

The location and configuration of the water source access road intersection with the access road will also change; the first increasing from 24 to 32 feet surface width, which will allow the company “to maintain consistency with all roads and pipeline/road crossings on the project.”

Oil Search says it will also “allow for construction and maintenance equipment to gain access to the north side of the pipeline; and allow straight-line removal and replacement of pumps year-round.”

Finally, the pipelines near the pump house pad will be realigned to cross the water source access road south of the pump house pad, which will change the pipeline length but won’t alter the overall estimate of total vertical support members, the company says.

Mitigation measure updates

The proposed project modifications, Oil Search says, necessitate changes to its response to DNR’s mitigation measures.

Regarding mitigation measure A.1.e., the updated boat ramp location and associated access road is within one-half mile of the banks of the Colville River. This location was selected based on additional community input and proximity to the river is required for the boat ramp to function as intended, the company says.

In regard to mitigation measure A.1.h.i., the “proposed pipeline between DS2M and the tie-in pad near Kuparuk CPF2 will parallel existing pipelines and/or gravel roads associated with the Kuparuk River unit with the exception of approximately 1.75 miles where the pipeline will be re-routed north of Lake K213/M8103,” Oil Search says, reminding the agency that the realignment is being made at the request of ConocoPhillips to avoid interference with existing Kuparuk unit operations.

Next Horseshoe?

The investor tour slides also identified the exploration prospects Oil Search will be drilling this winter, Mitquq and Stirrup, to test Nanushuk analogues (see story with map in the Sept. 29 edition of Petroleum News).

The Stirrup prospect is adjacent to the Horseshoe Block and “could de-risk additional fairways to underpin a possible standalone” Horseshoe development, the company says, noting Stirrup is a direct analogue to the Horseshoe 1 Nanushuk discovery drilled by Armstrong in 2015.



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