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BP’s Beaufort Sea field developments moving forward Northstar, Liberty field work update from Ken Konrad, BP Exploration (Alaska)’s new eastern North Slope business unit leader Kristen Nelson PNA News Editor
Ken Konrad took over from Octavio Pastrana in August as BP Exploration (Alaska) Inc.’s eastern North Slope business unit leader — inheriting responsibility for the company’s two big development projects, Northstar and Liberty.
Konrad told PNA Aug. 6 that most of the business unit leader announcements the company made earlier this year are effective when the BP Amoco acquisition of ARCO closes, but since Pastrana was transferred to Venezuela in August to help with the integration there, the eastern North Slope position transferred earlier.
The eastern North Slope business unit includes Badami, Endicott, Liberty, Northstar, and the rest of the eastern side including the greater Point Thomson area and Sandpiper, Konrad said, as well as “a general sort of cross-slope function called pre-projects — things that are still quite a bit less mature.”
Pre-projects, he said, involves engineering in support of exploration. It was previously within exploration, but was moved to the eastern North Slope asset to take advantage of a larger pool of engineering skills — both reservoir and surface engineering — to support pre-projects.
“It’s exploration,” Konrad said, “but nevertheless when you look at a prospect you need to think about if it was successful, what would you do … because if there’s no successful production option, then you probably don’t explore for it.”
On the development side of eastern North Slope projects, BP now has significant permits in hand for Northstar and work is ramping up, with first oil targeted for late 2001, Konrad said.
The environmental impact statement was the big milestone for Northstar.
“We’re pleased to be in a position where we have that most significant permit behind us,” Konrad said, and also pleased that after several years and several delays the approval “more or less in broad terms validated the original plan” of pipelines running straight to shore from production facilities at Seal Island.
Konrad said that Seal Island, the original exploration island, will be rebuilt this winter to serve as the Northstar production island. It is also likely that pipeline construction will take place this winter, he said.
And major fabrication work will be kicked off in Anchorage for the large production modules, which will be sea lifted up the summer of 2001.
Next summer a small sea lift will bring in infrastructure to the island, including the housing needed to support drilling, which will begin prior to the arrival of the production modules.
Pipeline to be laid through the ice BP did a pilot in 1996, Konrad said, to test its plan to trench through the ice to lay the pipeline to Northstar. The trench, he said, is more than sufficiently deep to protect from any potential ice scour or any other unique Arctic issues.
The pilot “more or less validated the concepts” of trenching, Konrad said, and allowed the agencies to visualize what was going on and also allowed engineers to work out details of the process in advance of the actual work.
What was learned in the pilot, he said, will be applied to the actual project.
Two pipelines will be laid in a trench from shore to Seal Island. The base design, Konrad said, called for “two state-of-the-art” leak detection systems. To satisfy agency concerns, he said, BP is now “working to develop a third prototype state-of-the-art leak detection system…” The third system, he said, will be a kind of a sniffer system. In addition to the mass balance and volume balance detection systems, a sniffer tube will be buried with the pipelines to detect very small leaks.
Modules to be built at MIX site The large modules for Northstar will be built at the North Star Terminal and Dock yard in Anchorage.
“They’ll use the site that BP developed down there for Northstar back when it was supposed to start,” Konrad said. Given the delays in Northstar, BP agreed to use that site for the MIX module. “So we’ll be using the same site, same dock,” he said.
The modules for Northstar will be the largest ever built in Alaska, Konrad said. “The production module will actually be two modules which will …be bolted together.”
There is already some activity at the yard, Konrad said, and also Northstar work going on in Alaska Petroleum Contractors Inc.’s Anchorage shop.
The five modules being built in Anchorage by VECO Construction Inc. and APC will be used for warehousing, utilities, housing and oil and gas processing. The largest unit, weighing about 3,500 tons, will be the largest oil field module ever built in Alaska.
BP said in a May 10 statement that module fabrication for Northstar would resume by mid-May at fabrication shops and yards in the Anchorage area as a result of BP’s receipt of a key federal permit authorizing the company to proceed with Northstar development. That permit was issued in early May by the U.S. Army Corps of Engineers.
The company expects module work to generate more than 100 construction jobs in the Anchorage area this year, increasing to more than 200 jobs in early 2000.
The housing modules will go up in the 2000 sea lift to support the drilling operation that begins later in the year, prior to the remainder of the modules arriving in a 2001 sea lift.
Liberty in EIS stage Meanwhile, in line behind Northstar is the Liberty project — also an offshore production island with pipelines running to shore. Liberty will be the first offshore North Slope project completely in federal waters and the U.S. Minerals Management Service is working on the environmental impact statement for the project.
MMS officials told PNA in mid-July that they are working with a facilitator to make sure that the various agencies involved in the permitting process identify early on issues which are important to them.
Konrad said he thinks that it’s “important to get the issues out early so that everyone can get comfortable with what’s going on.
“I don’t think late-day issues are helpful to anybody, frankly,” he said. “And so I think the MMS is doing a great job with trying to work it the right way from day one.”
Liberty similar to Northstar Konrad said that Liberty is similar to Northstar “in the sense that they’re both off shore. They’re very similar in the sense that they’ll both be producing from a manmade island in the Beaufort Sea. They will both have pipelines to shore using similar technology.”
And, he said, the fields will produce at broadly similar rates.
Northstar, however, is a gas-cycling enhanced recovery project with facilities “focused towards gas handling.”
Liberty, on the other hand, is the same formation as Endicott and will be more of a conventional waterflood similar to Endicott. “So it would be more geared toward cycling large amounts of water as opposed to cycling large amounts of gas.”
Differences between Northstar and Liberty are based on the facilities needed to recover the most oil possible, Konrad said, which is an EOR gas cycling project for Northstar because Northstar oil is “quite a bit lighter and it’s very amenable to gas cycling.” The oil at Liberty, however, is very similar to Endicott — a more typical North Slope type of crude oil and very amenable to waterflooding.
But similarities exist in the production islands and the logistics and how you support a drilling operation offshore and transport oil to shore.
“So hopefully we’ll be able to take a lot of our successes from Northstar and apply them to Liberty,” Konrad said.
Engineering to support permit process Although Liberty isn’t yet sanctioned — hasn’t received final corporate approval — engineering is being done to support the permitting process, Konrad said.
“There’s been a significant amount of engineering going on,” he said, “and we’ll continue to do so until the permits are in place. Once the permits are in place, we would hope and expect that it will be an economically viable project and we’ll begin when permits are in place. But it has not been formally sanctioned …”
Permitting discussions began with MMS in 1997 and BP has been working as diligently as it can with the agencies to make the process timely, he said.
Building on learnings BP builds on learnings from the past, Konrad said, “and technology is a very significant component of our business and I think one of the successes BP as a corporation has had is its ability to disseminate technology across a large global organization very quickly, both through technology processes but perhaps even more importantly the human networking processes.”
The human networking process is imbedded in the corporation’s fundamental structure, which is the peer group process, he said. The company is organized into various peer groups and “we manage ourselves within those peer groups so when we have issues and problems we’re working with peers from around the world and meeting with them on a regular basis and capturing those learnings,” Konrad said.
Gas businesses work with other gas businesses, he said. Onshore oil businesses work with other onshore oil businesses.
“So that’s kind of the fundamental structure of the company, to do that. And indeed, across peer groups there’s lots of exchange as well, but when you spend most of your time managing with people that are peers, you learn a lot. And you get challenged a lot. And it’s part of the design of the organization.”
As for capturing Northstar experience for Liberty, there are people within BP who work on both, he said, “and indeed, most of the contractors that are involved in the projects are the same contractors so we try to leverage learnings among many dimensions.”
Northstar contractors include Alaska Interstate Construction Inc., APC, Coastal Frontiers Inc., Houston Contracting Co., Intec Engineering Inc., Mustang Engineering Inc., National Tank Co., Sandwell Inc., VECO Construction and VECO Engineering Inc.
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