State adds gas to Milne Point Pipeline

State regulators are allowing Milne Point Pipeline LLC to convert the Milne Point Product Pipeline into a common carrier gas pipeline, as well as natural gas liquids.

The Hilcorp Alaska LLC transportation subsidiary requested the amendment to its certification earlier this year in an application to the Regulatory Commission of Alaska.

The 10.4-mile pipeline was built in 2001 to transport natural gas liquids to the Milne Point unit from an interconnection with the Oliktok Point Pipeline. But natural gas liquids shipments were suspended in December 2002, after an injection pump failed. The Milne Point unit no longer requires natural gas liquids for enhanced oil recovery and has no potential customers looking to use the line for natural gas liquids. The RCA allowed the company to isolate the Milne Point Product Pipeline from the Oliktok Pipeline in 2007.

The Milne Point Product Pipeline is capable of handling 39 million cubic feet per day and is estimated to have a project life of 2025. Although the Milne Point Pipeline company is not planning any immediate natural gas shipments on the pipeline, it anticipates the possibility of requiring natural gas for field operations in the future. Converting the pipeline also allows the company to prepare for a potential conversion of its diesel-powered Module 68 leak detection and metering facility at the unit to run on natural gas.

If so, Milne Point Pipeline would convert the first 400 feet of the pipeline to natural gas service and have the remainder of the pipeline “flanged off at Module 68 until a third party shipper for natural gas transportation service appears,” according to filings.

Additionally, the Oliktok Point Pipeline is currently certified to ship either natural gas or natural gas liquids, and Milne Point Pipeline wants to have the same flexibility.

- ERIC LIDJI