Providing coverage of Alaska and northern Canada's oil and gas industry
March 2018

Vol. 23, No.9 Week of March 04, 2018

Design change for Hilcorp pipeline plan

Proposed oil line system would use short converted gas line on Kenai Peninsula to transfer oil from CIGGS to the Swanson River line

Alan Bailey

Petroleum News

Cook Inlet Pipe Line Co., a subsidiary of Hilcorp Alaska, has modified the design of the pipeline system that it plans to use to ship crude oil from the west side of Cook Inlet to Nikiski on the Kenai Peninsula. The company has filed the amended design with the Regulatory Commission of Alaska in conjunction with the companyís request for RCA approval of the planned pipeline system changes.

Use of a CIGGS line

CIPL wants to ship oil under Cook Inlet using one of the existing twin natural gas pipelines that form part of the Cool Inlet Gas Gathering System. Gas carrying capacity across the inlet would be maintained by laying a new subsea gas line between the Tyonek offshore gas production platform and Ladd Landing on the west side of the inlet. An onshore section of the existing gas line between the Tyonek platform and Nikiski would also be replaced.

The idea is to eliminate the use of the Drift River oil terminal on the west side of the inlet. There are safety concerns associated with the terminal because of the terminalís proximity to Redoubt Volcano.

The use of one of the CIGGS lines involves the construction of a new 3.3-mile oil line on the west side of the inlet, to connect the existing Cook Inlet pipeline to CIGGS. At the Kenai Peninsula end of CIGGS, CIPL had planned to build a short, new oil line, called the CIPL E 10 line, to connect the converted CIGGS line to the oil line from the Middle Ground Shoal field. Connecting the CIPL E 10 line to a point near the northern end of the Middle Ground Shoal line would provide a route for flowing oil from CIGGS to the oil refinery at Nikiski.

A better arrangement

However, negotiations and technical work conducted with Kenai Pipeline Co., the operator of the Middle Ground Shoal line, has identified a more cost-effective pipeline arrangement on the Kenai Peninsula, CIPL told the commission.

The plan now is to connect the new CIPL E 10 oil line to an existing gas pipeline, called the LP CIGGS line, that used to deliver natural gas produced from the Middle Ground Shoal field to the Nikiski fertilizer plant that is now owned by Nutrien (formerly Agrium). In converting the LP CIGGS line to the carriage of oil, the line would be connected to the Swanson River oil pipeline at a point where LP CIGGS crosses the Swanson River line. The Swanson River line delivers oil from the Swanson River oil field to Nikiski.

With the mothballing of the Nikiski fertilizer plant, the LP CIGGS pipeline has not been used for about 10 years, but has been maintained, pressured with gas, and is in good condition, CIPL told the commission. If Nutrien decides to restart the fertilizer plant, the company would not need the LP CIGGS line, since gas could be delivered to the plant through the nearby Kenai Beluga Pipe Line, CIPL wrote.

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