Gas offtake approved AOGCC says Prudhoe Bay can export natural gas for AKLNG project ALAN BAILEY Petroleum News
In a key development for the proposed future export and sale of natural gas from the North Slope, the Alaska Oil and Gas Conservation Commission has issued an order approving a significant increase in the rate at which gas can be removed from the Prudhoe Bay field. BP, the field operator, had applied for the increased natural gas offtake, given that the participants in the gas export project need to know whether it will be permissible to export sufficient North Slope gas, prior to committing to the huge expense of the front-end engineering and design phase of the project.
In a parallel development, AOGCC has also approved the future offtake of natural gas from the Point Thomson field, the other anticipated source of gas for export (see “AOGCC approves Point Thomson pool rules” on page 4).
Export rates The natural gas export project, known as AKLNG, anticipates the shipment of a daily average of 3.5 billion cubic feet of gas down a pipeline from the North Slope to Southcentral Alaska, where the gas would be converted to liquefied natural gas for shipment to market. The Prudhoe Bay field would supply 2.7 bcf of that daily throughput, with Point Thomson supplying the remaining 0.8 bcf.
AOGCC has the role of assuring that any natural gas sale arrangement maximizes the hydrocarbon recovery from the North Slope fields. Gas is re-injected into Prudhoe Bay as part of a series of tactics for maximizing oil recovery from the field. But the commission has now agreed that future gas sales would be beneficial.
“Selling gas from the Prudhoe Oil Pool is necessary to maximize ultimate recovery from the reservoir,” the commission stated in its order issued on Oct. 15.
3.6 bcf per day In its order, specifying a new pool rule for Prudhoe Bay, AOGCC said that it would allow an average annual gas offtake of 3.6 bcf per day from the field. The previous limit was 2.7 bcf per day. BP and ExxonMobil, two of the field owners, had asked that the offtake limit should be increased to 4.1 bcf per day, to accommodate the 2.7 bcf per day required for AKLNG, with the remaining volume covering gas for North Slope use and allowing for any glitch in gas supplies from the Point Thomson field. However, ConocoPhillips and Chevron, the other Prudhoe Bay owners, had told the commission that a 3.6 bcf per day offtake would be sufficient - the commission has clearly agreed with that view, saying that an offtake rate of 3.6 bcf per day would provide adequate capacity to meet the needs of the AKLNG project.
“This determination is made without prejudice to future consideration should circumstances change,” the commission wrote. “Monitoring of development operations within the Prudhoe Oil Pool prior to commencement of major gas sales is vital to ensure that liquids recovery is maximized.”
Assuming the use of 0.6 bcf per day of fuel gas on the North Slope, under normal circumstances 3.3 bcf per day would need to be exported from the Prudhoe Bay field, ConocoPhillips had told the commission during an Aug. 27 hearing. Then, given that the permitted offtake volume presents a daily average for a complete year, with the possibility of exceeding the 3.6 bcf limit on individual days, there would be sufficient spare capacity from Prudhoe Bay supplies over the course of a year to more than cover any disruption to other supplies, ConocoPhillips had said. And limiting the maximum gas offtake would minimize the potential impact of gas exporting on liquids production from the field, the company said.
Reservoir simulation The commission’s order says that confidential testimony regarding Prudhoe Bay reservoir modeling had demonstrated simulations of several continuing development models for the field, including the use of different gas offtake rates and different assumed start dates for the AKLNG project. The results of these simulations showed that, because the field now contains significantly more barrels of oil equivalent hydrocarbon in the form of gas rather than oil, maximum ultimate hydrocarbon recovery from the field requires major gas sales. And the ultimate recovery is insensitive to the timing and scale of those sales, the order says. Apparently, the only parameter that would cause the size of the ultimate hydrocarbon recovery to be significantly different from anticipated levels would be a discovery that the scale of the Prudhoe Bay oil pool is different from what is expected, a discovery that is improbable given the amount of data that are available for the field.
The order says that after major gas sales begin, Prudhoe Bay field production would continue, albeit with less natural gas available for re-injection for enhanced oil recovery. Carbon dioxide effluent from an AKLNG gas treatment plant would, however, become available for injection into the reservoir. Eventually the production wells would become unable to supply enough gas to meet AKLNG sales requirements - at that point the field working interest owners anticipate converting existing injection wells in the field’s gas cap into production wells, the order says.
AOGCC has not imposed an expiration date on the new Prudhoe Bay pool rule.
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