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New field ‘challenge’ ExxonMobil: Schedule is tight for achieving first production at Point Thomson Wesley Loy For Petroleum News
Meeting the target date for starting production from Alaska’s Point Thomson field will be “a challenge,” an ExxonMobil executive said.
The company has pledged to start producing natural gas condensate from the remote eastern North Slope field by the winter of 2015-16.
But it still has multiple permitting hurdles to clear before it can begin construction of production facilities and a pipeline to feed the condensate into the existing North Slope transportation network.
Company representatives appeared Oct. 23 at a hearing of the Regulatory Commission of Alaska, which is considering an ExxonMobil subsidiary’s application for a certificate of public convenience and necessity to build and operate the 22-mile pipeline.
One commissioner asked the ExxonMobil reps whether they are on schedule with the Point Thomson project.
“We are on schedule, but it is very tight,” replied Jeff Ray, vice president of PTE Pipeline LLC, the company seeking the certificate for the Point Thomson Export Pipeline.
10,000 barrels a day Ray said it will be “a challenge” to get production online at Point Thomson by the target timeframe.
The target is significant in that it’s part of an understanding between ExxonMobil and the state, which owns the land that will host the Point Thomson development. State officials for many years have pushed ExxonMobil to bring the field into production, and the two sides in March signed a legal settlement for phased development.
The first phase will involve producing 10,000 barrels a day of condensate, a light hydrocarbon associated with natural gas. It takes a liquid form, and can flow down the 800-mile trans-Alaska pipeline mixed with conventional North Slope crude oil.
Point Thomson is about 60 miles east of Prudhoe Bay, along the Beaufort Sea coast. ExxonMobil already has drilled two wells for the project, and now must build production facilities and the export pipeline.
Aside from ExxonMobil, the field operator, major stakeholders in Point Thomson include BP and ConocoPhillips.
Point Thomson holds an estimated 8 trillion cubic feet of natural gas and hundreds of millions of barrels of crude oil and other petroleum liquids.
But the field is expected to be a bear to develop fully due to its complex geology and extreme subsurface pressures. It also will take a multibillion-dollar North Slope natural gas pipeline to develop Point Thomson’s enormous gas reserves.
Major authorizations needed The Oct. 23 RCA hearing was brief, lasting only about half an hour. Commissioners had relatively few questions for the ExxonMobil managers and lawyers.
ExxonMobil wants “expedited consideration” from the RCA, stressing it needs the certificate in time for the upcoming winter construction season. The company has asked the commission to make a decision on its application by Nov. 30.
At an estimated cost of $253 million, the pipeline will have a design capacity for up to 70,000 barrels a day, a far greater volume than the initial production level ExxonMobil plans.
The pipeline, 12 inches in diameter, will connect the main, or central, well pad at Point Thomson to the 12-inch, BP-owned Badami pipeline. The Point Thomson line will be elevated 7 feet off the tundra.
Aside from the certificate, ExxonMobil needs a number of other major authorizations before it can proceed with the Point Thomson development.
The state Department of Natural Resources appears close to issuing a right-of-way lease for the pipeline. The State Pipeline Coordinator’s Office, part of DNR, is taking written public comment on the proposed lease through Oct. 30. And the department recently held a series of public hearings in North Slope villages.
The biggest remaining authorization ExxonMobil needs is a permit from the U.S. Army Corps of Engineers. The permit is required for construction that could affect wetlands.
The Corps has said it might be as late as Nov. 21 before it renders a “record of decision” on the permit.
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