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Decision issued on Pikka seawater plant
Oil Search granted entry authorization, conditional easement by state of Alaska; ConocoPhillips expresses concern for Kuparuk ops Kay Cashman Petroleum News
On Jan. 28, the director of the Alaska Department of Natural Resource’s Division of Oil and Gas, Tom Stokes, granted Oil Search an entry authorization, or EA, for five years and a conditional easement for 35 years once the terms of the EA have been met, for the company’s proposed seawater treatment plant on the North Slope.
The purpose of the treatment plant is to provide a reliable, quality and predictable supply of enough make-up water for improved hydrocarbon extraction from Pikka unit reservoirs.
The seawater treatment plant will be on state tidelands adjacent to Oliktok Point in Simpson Lagoon in the ConocoPhillips Kuparuk River unit. Importantly, Oil Search’s project is a temporary structure adjacent to other oil and gas infrastructure on Oliktok Point.
Oil Search proposes to build the seawater treatment plant off-site on a submersible barge that will be 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 seawater treatment plant arrives on location; following plant installation screeding may occur in the same area as needed for maintenance.
The treatment plant 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. (On Aug. 18 Oil Search applied to DNR for an easement under AS 38.05.850 for the plant’s seawater and fuel gas pipelines easement (ADL 417493). At the time of the Jan. 28 decision, DNR was still adjudicating that application.)
The dimensions of the surface area of the gravel pad and seawater treatment plant’s barge will be 6.83 acres. The initial construction easement will be 30.3 acres. The operational easement will be 13 acres, including buffers.
Removing barnacles, etc. The plant will take seawater from the Beaufort Sea and treat it as needed, a process that involves removing macro-organisms, such as barnacles; microorganisms, such as bacteria; dissolved solids; and suspended solids from the water.
Removing oxygen from the water to prevent corrosion of pipelines is also part of the process. Effluent discharged back to the Beaufort Sea will consist only of the filtered suspended solids.
The treated seawater will then be piped to the Pikka unit southeast of the East Channel of the Colville River Delta and west of the Kuparuk River unit to be injected into the Nanushuk reservoir to maintain reservoir pressure and facilitate enhanced oil recovery through waterflood.
Scope of the decision In applying for an easement under AS 38.05.850, Oil Search has of Jan. 28 provided only a conceptual design for seawater treatment, the Stokes decision said.
On Jan. 7, the company provided the agency with additional information, but Stokes said Oil Search’s information shows the project is still in conceptual design phase.
Before construction activities begin “a detailed project execution plan and schedule, front end engineering and design (FEED) information, and additional environmental studies are required for DNR to assess the cumulative impacts of this project, at which time, there will be an additional and final review of the project.”
To ensure that “unreasonable interference to existing operations will not occur as a result of the seawater treatment plant project,” the director’s decision said DNR requires Oil Search to “negotiate in good faith for an equitable use agreement with existing Oliktok Point operators.”
Two phases The seawater treatment plant project consists of two phases, with different proposed project activities for each phase, Stokes noted.
Pre-construction and construction represent the first phase, and assuming the project can be built within parameters acceptable to DNR, “termination would be the final phase. In other words, if the STP (seawater treatment plant) is built to design specifications substantively in the same form as those submitted in support of the notice to proceed for the pre-construction and construction phase, a public notice period and opportunity to comment will not be necessary prior to the director issuing the notice to proceed for operations.”
The cumulative impacts of each phase must be analyzed before the next phase can go ahead, and as needed provide “timely and meaningful public notice and opportunity to comment.”
Approval after this analysis will be in the form of a director’s determination that “includes reasonably foreseeable cumulative impacts and mitigation measures on fish and wildlife habitat and populations and their uses, subsistence uses, historic and cultural resources, and other public uses,” Stokes’ decision said.
Authority delegated DNR’s authority to issue an easement is established under AS 38.05.850. This authority was delegated to the division by the DNR commissioner in an Aug. 17, 2006, memorandum. This authority is implemented, in part, through regulations at 11 AAC 96.
Under AS 38.05.035(e)(6)(H), a written best interest finding is unnecessary; however, AS 38.05.850(c) requires public notice if the director determines, by evaluation of the nature and duration of the intended use, that the easement will not be functionally revocable, the decision said.
In this case, the director has determined that the easement will be functionally irrevocable because Oil Search will require a reliable and long-term supply of make-up water for Pikka development and production activities.
Public notice of the company’s easement application was previously provided, Stokes decision noted.
Conflicts, pending interests The requested easement is located within active oil and gas lease ADL 355024 and tidelands lease ADL 403737, both issued to ConocoPhillips. It would require access through active oil and gas lease ADL 373301, also issued to ConocoPhillips.
The requested easement is consequently contingent upon reasonable access to State of Alaska surface lands within the leases. ConocoPhillips has expressed concern that authorization of the seawater treatment plant easement “may cause potential unreasonable interference with existing and future Kuparuk River unit operations.”
Because the division will have an opportunity to review Oil Search’s detailed project execution plan and FEED information before construction activities begin, any concerns raised by ConocoPhillips “can be addressed,” Stokes’ decision said.
ENI’s onshore production pad for the Nikaitchuq unit, easement ADL 419387, is adjacent to the proposed seawater treatment plant easement site on Oliktok Point as well. ENI did not comment on Oil Search’s proposed project.
The director’s decision pointed out that EA Stipulation 34 further requires Oil Search to provide notice to both ConocoPhillips and ENI of construction, operations and maintenance plans for the EA and easement to avoid unnecessary and unreasonable interference with ongoing operations.
Access to the area for construction and operation of the seawater treatment plant easement will be through existing Kuparuk unit infrastructure and ancillary oilfield roads, regulated by security checkpoints in Deadhorse, and under agreements for the use of these improvements with others. The director’s decision does not authorize use of those other improvements.
During operations, the public will be allowed access to and along public and navigable water bodies within the various easements.
Coexistence for years Multiple users have coexisted at Oliktok Point for over a decade the director’s decision noted: “To the knowledge of the Division, there have been no cases of unreasonable or unnecessary interference to CPAI (ConocoPhillips Alaska Inc.) operations since the decision for the Nikaitchuq Unit Onshore Production Pad easement was issued on March 23, 2006.”
Stokes’ decision acknowledges that the construction and operation of Oil Search’s seawater treatment plant “could result in operational inconveniences to CPAI or ENI but cannot determine conclusively that unreasonable or unnecessary interference to the access or operations of the existing facilities or operations at Oliktok Point will occur” until the treatment plant project enters into FEED and more detailed information is provided for review and analysis.
When the agency does review that information “any new concerns raised during a subsequent notice and comment period” will be considered.
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