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Providing coverage of Alaska and northern Canada's oil and gas industry
April 2021

Vol. 26, No.15 Week of April 11, 2021

Oil Search gets clearance for seawater treatment plant lines

Kay Cashman

Petroleum News

On April 5, Alaska’s Division of Oil and Gas issued Oil Search Alaska an entry authorization for five years and a conditional private, nonexclusive easement for the Pikka unit’s Seawater Treatment Plant’s make-up water pipeline, fuel gas pipeline and fiber optic cable. The decision, signed by Division Director Tom Stokes, was “necessary for the practicable development and production” of Pikka unit oil.

If subsequent reviews “result in the initiation of production and maintenance activities, then the Division will issue a final easement to OSA,” the term of which will be 35 years, Stokes wrote.

West of the central North Slope in the Pikka unit, the Pikka project is the first of several oil developments that OSA has in the works. It was formerly known as the Nanushuk development; hence the ND-A, ND-B, and ND-C pad and other Nanushuk names, despite the fact the project will initially target oil deposits in both the Nanushuk and Alpine C reservoirs - two of six stacked plays in the unit that might eventually be tapped. That said, Nanushuk is by far the largest reservoir in the area.

Pikka is scheduled to go online in 2025, with Phase 1 expected to produce 80,000 barrels a day.

OSA applied for the easement on Aug. 18 under AS 38.05.850, requesting authorization to build and operate a 20-inch make-up water pipeline, a 12-inch fuel gas pipeline, and a fiber optic cable. The 18.4-mile pipelines and cable will connect the proposed Seawater Treatment Plant, or STP, at Oliktok Point to the company’s planned tie-in-pad, located just northwest of the Kuparuk Central Processing Facility 2, or CPF-2, within the Kuparuk River unit.

The purpose of the STP is to provide a reliable source of quality make-up water for Pikka.

The pipelines and fiber optic cable will be placed on the same horizontal support members, or HSMs, and will require approximately 2,115 new 12 to 20-inch-diameter vertical support members, or VSMs, spaced 55 to 65 feet apart. The first 0.2 miles of piping will be placed below existing gravel fill and stretch from the east side of Oliktok Point to Eni’s Oliktok production pad.

From there it will run above ground, generally parallel to and within 500 feet of the existing Nikaitchuq Pipeline, Oliktok Road and Kuparuk Road. The STP pipelines project is expected to require a 626.6-acre construction easement and a 221.18-acre final operation easement once fully constructed.

The easement will be centered on the VSMs along the pipeline alignment route. The construction easement will be 300 feet wide and the operation easement 100 feet wide, with a few exceptions around existing obstacles.

Construction activities will include driving sheet piles; driving piles; trenching; excavating; placing gravel fill; screeding; installing VSMs, pipelines, and fiber optic cable; and building ice roads and pads.

Pipeline construction will take place using ice roads and existing gravel roads for the 2022-23 and 2023-24 winter and summer construction seasons.

Surface activities will occur on ConocoPhillips oil and gas leases: ADL 25513, 25520, 25629, 25630, 25633, 25634, 25641, 25646, 25653 25654, 355023, 355024, and 373301.

Scope of decision

The scope of the April 5 director’s decision is limited to the determination of whether issuing an entry authorization to OSA for the construction and operation of the STP project on state land is a use of the land that will be of greatest economic benefit to the state of Alaska and the development of its resources.

The division “reviewed and evaluated the request for an easement with available land management information and, in accordance with AS 38.05.850,” and concluded that it is.

The Pikka unit “needs access to seawater, which is essential to drilling and production activities. OSA has stated that results from pore throat analyses on Nanushuk reservoir rock samples provided evidence that higher levels of filtration than what is available at existing facilities will be necessary to prevent the Nanushuk reservoir pore throats from becoming clogged and inhibiting full and efficient hydrocarbon recovery over the life of the field,” the director’s decision said.

In applying for an easement under AS 38.05.850, OSA “has at this time provided only a conceptual design for the project. Before construction activities commence, a detailed project execution plan and schedule, front end engineering and design, or FEED, information, and additional environmental studies are required” for the agency to assess the cumulative impacts of the project, “at which time there will be an additional and final review” of the project.

To make sure that “unreasonable interference to existing operations will not occur” as a result of the STP project, the division required OSA to negotiate in good faith for an equitable use agreement with all authorized concurrent users of state land in the project area.

Two phases

The STP project consists of two phases, with different proposed activities for each phase.

“Preconstruction and construction represent the first phase. Assuming the project can be built within parameters acceptable” to the division, termination would be the final phase.

“In other words, if the pipelines are built to design specifications substantively in the same form as those submitted in support of the Notice to Proceed for the pre-construction and construction phase, a public notice period and opportunity to comment will not be necessary prior to the director issuing the Notice to Proceed for operations. OSA shall submit a detailed summary of each phase prior to initiation of that phase,” the decision said.

The agency plans to conduct further analysis of the project at each phase pursuant to its duties to take a hard look at cumulative and reasonably foreseeable impacts of the project.

The division’s approval before the next phase of the project can proceed will be in the form of a Director’s Determination that includes reasonably foreseeable cumulative impacts and mitigation measures on fish and wildlife habitat and populations and their uses, subsistence uses, historic and cultural resources, and other public uses.

The determination will also include a Notice to Proceed containing specific terms and conditions the director finds necessary to protect the state’s interest.

- KAY CASHMAN






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