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Nutaaq files $1.10 tariff for next year Badami to Endicott pipeline requested $20.60 rate for November, December, to make up for less Point Thomson volume than expected KRISTEN NELSON Petroleum News
Based on a tariff filing from the Nutaaq Pipeline it appears that ExxonMobil plans to have Point Thomson on full production starting next year. Since startup in April production has been well below the expected 5,000 barrel per day startup rate, and nowhere near the 10,000 bpd expected for full production at the facility.
Nutaaq Pipeline LLC filed a $20.60 per barrel tariff for the Badami Oil Pipeline in October with the Regulatory Commission of Alaska. That tariff revision, up from $2.71 per barrel, was to make up for lower-than-expected volumes on the line coming out of the Point Thomson unit via the PTE Pipeline, which connects with the Badami line at that field (see story in Oct. 30 issue of Petroleum News).
Nutaaq, owned by Glacier Oil and Gas, said the $20.60 rate would be only for November and December and would result in a blended average tariff for the line of $5.61 for 2016, lower than blended rates for 2015 and 2014.
The company told RCA when it filed for the increased tariff that the 2017 revised rate would be filed soon and was expected to be about $3 per barrel, which would have been about 30 percent lower than the blended 2016 rate.
The 2017 proposed rate, which Nutaaq filed Nov. 1, is actually considerably lower - $1.10 per barrel.
Nutaaq told the commission the proposed 2017 rate is “based upon updated Point Thomson production estimates for 2017.” Point Thomson volumes The Point Thomson facility was built to produce 10,000 barrels per day of condensate and reinject natural gas, with initial production rates estimated at 5,000 bpd. Based on data in Alaska Oil and Gas Conservation Commission reports Point Thomson production has varied from a high of 1,591 bpd in April, the month production began, to a low of 31 bpd in September, the latest month for which AOGCC data are available.
From data available from the Alaska Department of Revenue’s Tax Division, which wraps Point Thomson production in with that from Endicott and Badami, Point Thomson production appears to have varied considerably from day to day, so the bpd averages calculated from AOGCC monthly volumes are for overall purposes of comparison with the 5,000 bpd expected startup rate and the 10,000 bpd expected full production rate.
Commissioning continues ExxonMobil told Petroleum News in late October that commissioning of the Point Thomson gas compression system continues.
Production from the April startup through the end of September averaged some 625 bpd.
Nutaaq told RCA that the proposed tariff for 2017 is based on “anticipated materially increased production from Point Thomson, up some 452 percent” from 605,008 barrels this year to 3,341,910 barrels in 2017.
The 2016 estimate for production would be the equivalent of some 2,200 bpd for the nine months. To reach that overall average daily production for the remainder of the year would average some 5,000 bpd.
The 3.34 million barrels estimated for 2017 would be the equivalent of about 9,200 bpd.
Point Thomson is designed to produce up to 10,000 bpd of natural gas condensate and inject up to 200 million cubic feet of recycled gas, ExxonMobil said.
When the field started production in April the initial rate was expected to be some 5,000 bpd of condensate and 100 million cubic feet per day of recycled gas.
ExxonMobil said daily production would fluctuate during commissioning of the gas injection system.
“We will safely ramp up production once these activities are complete,” the company said.
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