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AOGCC schedules Toghotthele hearing Commission warns BlueCrest about gas flaring, allows spacing exemptions at Kitchen Lights, water injections at three units ERIC LIDJI For Petroleum News Editor’s note: Petroleum News is launching a monthly column to report on the orders and notices issued by the Alaska Oil and Gas Conservation Commission during its normal course of business. This inaugural installment of the column covers June 2016. Doyon Ltd. is requesting an Alaska Oil and Gas Conservation Commission exemption to statutory spacing requirements for its Toghotthele No. 2 exploration well.
The exemption would allow the Alaska Native corporation to drill the well within 500 feet of a property line where land ownership changes, in the Interior region of the state.
The AOGCC has tentatively scheduled a hearing on the matter for Aug. 4, although such hearings only proceed if there is a written request from a member of the public.
The commission is accepting requests through July 15.
Cosmopolitan flaring AOGCC Chair Cathy Foerster sent a notice of potential waste determination to BlueCrest Alaska Operating LLC Chief Operating Officer John M. Martineck on June 10.
Gas disposition reports filed for the Cosmopolitan project in March and April 2016 attributed flaring of produced gas to startup of production processing equipment at the Cook Inlet field, according to the letter. But a late May 2016 inspection revealed that efforts to commission equipment continue to be a reason for gas flaring at the field.
“The AOGCC will not initiate enforcement proceedings for amounts flared in April and May 2016,” Foerster wrote. “However, two months is more than sufficient to conclude commissioning efforts. Flaring produced gas for the purpose of allowing well production, or for any reason beyond what is necessary for facility operations, emergencies that threaten life or property, of for preventing loss of ultimate recovery, is waste.”
Any additional flaring, Foerster added, would lead to enforcement proceedings.
Kitchen Lights unit On June 10, the commission granted (Commission Order No. 723) a request from Furie Operation Alaska LLC for an exemption to statutory spacing requirements for the Kitchen Lights Unit No. A-2 well. The exemption allows the company to drill the proposed well within the same governmental section as the existing Kitchen Lights Unit No. 3 well. Both wells are capable of producing from the same pools.
Furie requires the KLU No. A-2 well to increase deliverability of natural gas from the Sterling and the Beluga Undefined Gas Pools in order to meet existing gas utility contracts in Southcentral, according to the commission findings, and the well would “not result in waste or jeopardize correlative rights of adjoining or nearby owners.”
On June 23, the commission also granted (Commission Order No. 724) a separate request from Furie for a spacing exemption for the Kitchen Lights Unit No. A-1 well. The proposed natural gas development well would also be near the existing KLU No. 3 well.
Trading Bay unit On June 8, the commission allowed (Area Injection Order No. 5.026) Hilcorp Alaska LLC to continue water-only injections into the Trading Bay Unit No. D-14RD well.
The company shut in the Cook Inlet well in early March 2016, after reporting an unusual pressure reading. The results of a subsequent survey of the well, completed in May, “indicate that injection is confined to the authorized zone,” according to the AOGCC. “Accordingly, the AOGCC believes that the well’s condition does not compromise overall well integrity so as to threaten human safety or the environment.”
On June 29, the commission allowed (Area Injection Order No. 5.027) Hilcorp to resume similar water-only injections at the Trading Bay Unit No. G-05RD well. Hilcorp shut in the well after reporting an unusual pressure reading in late May 2016. A subsequent survey completed in early June convinced the AOGGC of the integrity of the well.
In both cases, the AOGCC has instituted certain daily, monthly and annual recordkeeping and reporting requirements to ensure the continued integrity of the two injection wells.
ConocoPhillips On June 23, the commission allowed (Area Injection Order No. 2C.036) ConocoPhillips Alaska Inc. to continue water-only injections at the Kuparuk River Unit 3S-26 well.
The company reported an unusual pressure reading on May 12, while injecting gas into the well. After several tests, the well showed no signs of pressure communication during water injections, which convinced the commission to allow limited injections.
Drill Site 3S is in the northwestern corner of the unit.
On the same day, the commission allowed (Area Injection Order No. 16.006) ConocoPhillips to continue water-only injections at the Kuparuk River Unit 2N-306 well.
The company reported an unusual pressure reading on April 18, while injecting gas into the well. After several tests, the well showed no signs of pressure communication during water injections, which convinced the commission to allow limited injections.
Drill Site 2N is in the southwestern corner of the unit.
Also on June 23, the commission allowed (Area Injection Order No. 30.007) ConocoPhillips to continue water-only injection at the Colville River Unit CD3-112 well.
The company reported an unusual pressure reading on March 25, while injecting miscible gas into the well. After several tests, the well showed no signs of pressure communication during water injections, which convinced the commission to allow limited injections. The commission imposed reporting requirements on all three wells.
On June 28, the commission cancelled Area Injection Order No. 2B.014 at the request of ConocoPhillips. The commission issued the order in August 2006 to set out condition to allow the company to continue water injection at the Kuparuk River Unit No. 2G-03 well, which had experienced unusual pressure reports. ConocoPhillips repaired the problem during a May 2016 rig workover operation, which negated the need for the order.
On June 14, the commission issued a notice of violation against ConocoPhillips for problems related to a safety value systems performance test at the Kuparuk River unit.
While witnessing the performance test on June 2, AOGCC staff identified a failure rate of 13.6 percent (three failures on 22 components of 11 wells). Existing regulations require more frequent testing whenever safety value systems failure rates exceed 10 percent.
The AOGCC also accused the company of failing to “substantiate” the testing on a low pressure pilot on the Kuparuk River Unit No. 1A-28 well after the device was replaced and the well returned to service. The pilot failed an initial performance test on June 2 and passed the same test later in the day after being replaced, according to the AOGCC.
As part of its investigation (docket OTH-16-018) the commission asked ConocoPhillips to provide information about low pressure pilot and the missed performance test by June 24 and imposed more frequent performance testing on safety valve systems at the 1A-pad.
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