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DEC finalizes Julius R. permit
renewal, including produced water
Kristen Nelson Petroleum News
Furie Operating Alaska is one step closer to being able to produce Sterling formation gas at its Kitchen Lights unit in Cook Inlet. On Feb. 12 the Alaska Department of Environmental Conservation released an Alaska Pollutant Discharge Elimination System proposed final order for the Julius R. Platform in the KLU.
Production has been primarily from the Beluga formation, which produces dry gas and nominal amounts of water; Sterling formation production includes substantially more water - more than can be handled by the current system, which sends produced water to shore for disposal.
The proposed final permit and associated documents are at http://dec.alaska.gov/water/wastewater under notices of review.
The final permit review began Feb. 12 and ends Feb. 19.
Issuance of the proposed final permit follows public notice and a comment period on the draft permit and fact sheet.
Furie, under previous ownership, had an APDES permit, and applied for reissuance in March 2019, submitting an amendment in November 2019 to include an additional discharge of produced water.
DEC said inclusion of a treatment system and discharge of produced water represents “a critical modification” of the proposed permit designed “to mitigate hydrate formation in the gas pipeline to the onshore production facility” and will allow for continued gas production from the Julius R. Platform.
The proposed reissuance authorizes two additional discharges: greywater from a mobile oil drilling unit and produced water.
Original permit The original permit was applied for in 2013 and issued in 2014, for a five-year term. It covered wastewater discharges associated with construction of the offshore platform and a marine pipeline that included horizontal directional drilling as well as discharges from operation of the platform and a MODU periodically stationed at the platform for development drilling.
The 2014 permit was based on Beluga formation gas production and the assumption that produced water from that formation would be minimal, some 50 barrels per day, which would be transported to the onshore Central Production Facility for disposal.
However, DEC said, after Furie completed wells into the Sterling formation there was a significantly increased volume of produced water from the Sterling formation, some 2,000 bpd.
“Further compounding produced water management difficulties, during the winter conditions of January 2019 while producing from the Sterling, gas hydrates formed in the produced fluids within the pipeline to the onshore facility causing a pipeline blockage substantial enough to completely halt gas production for 75 days.”
Furie operating was acquired out of bankruptcy by a new owner, HEX Cook Inlet, in July 2020.
DEC said that on Jan. 14, 2021, Furie advised DEC that a hydrate plug formed in the gas pipeline on Jan. 10, 2021. “Although the plug was destroyed,” DEC said, “the incident raised ongoing concerns highlighting the importance of a timely permit issuance.”
Facilities construction DEC said the previous Furie owner had submitted engineering plans in February 2020 for water handling equipment on the platform, which were approved, but the previous owners held off starting construction until the permit became effective.
After HEX Cook Inlet took over operatorship on July 1, 2020, in addition to working on existing wells and facilities, the company restricted production to the Beluga formation, but needed to return the Sterling reservoir to production because Beluga production was in decline.
“Obtaining the platform water handling permit more than doubles our remaining reserves and revenue,” the company’s CEO and president, John Hendrix, said in a Dec. 18 presentation to a Commonwealth North study group. (See story in Dec. 27 issue of Petroleum News.)
“Right now we are out there working on our water handling equipment to get it up and running,” Hendrix said. “We don’t have a permit to operate it, but they did give us a permit to construct.”
He said it was worth it to spend “a million or two in hopes we will get the operating permit because if all of a sudden we get it and the equipment is not running, we could lose six months of production.”
The new owners turned over the majority of field operation contracting to Alaska-based Udelhoven Oilfield Services. In his December presentation Hendrix said Udelhoven was pre-installing the water handling equipment and had been out on the platform “with about 14 people for two weeks, welding and setting new separators.”
- KRISTEN NELSON
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