Hilcorp requests waiver for propane use

Kristen Nelson

Petroleum News

Hilcorp North Slope, the Prudhoe Bay operator, has applied to the Alaska Oil and Gas Conservation Commission for an exemption to an AOGCC regulation which requires hydrocarbons leaving a unit to go through a sales meter.

In its application the company said it is requesting a waiver for a regulatory requirement for propane in use at the Prudhoe Bay unit as a fuel in unit vehicles.

The company told AOGCC it is modifying PBU owned vehicles to operate on dual fuels, with propane as the primary fuel source and unleaded gasoline the secondary source. The propane is produced at the Prudhoe Central Gas Facility, Hilcorp said, "and produces fewer emissions including reduced GHG emissions than a gasoline fuel." The company also noted that all unleaded gasoline in use has to be imported.

Some 30 vehicles are currently operating on both propane and unleaded gasoline, and Hilcorp said subject to working interest owner alignment, it "plans to continually install dual fuel conversion kits on PBU owned vehicles."

A sales quality meter is being installed at the CGF and when Prudhoe begins to sell propane produced at the facility, "effectively severing certain volumes of propane from the PBU, all PBU CGF produced propane will flow through the sales quality meter."

Propane being used to support operations at Prudhoe is not accounted for as a sale, the company said.

The issue arises when propane-fueled vehicles leave the unit boundaries which can occur, Hilcorp said, when vehicles travel to another unit to borrow or purchase tools needed for unit operations; when Prudhoe personnel respond to emergencies in mutual aid support on the haul road, on another operator's assets or to support North Slope residents; or when Prudhoe personnel assist governmental and regulatory agencies with transportation across the North Slope.

The company is requesting that AOGCC waive the requirement "for the specific use of CGF propane as a fuel in vehicles supporting PBU operations."

The commission has tentatively scheduled a public hearing on the request for 10 a.m. Nov. 14 at its Anchorage offices but said if requests for a hearing are not timely by 4:30 p.m. Oct. 26, it may issue an order without a hearing. Call 907-793-1223 after Oct. 19 to learn if AOGCC will hold the hearing.

--Petroleum News