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Oliktok Pipeline from NGL back to gas
Kristen Nelson Petroleum News
Oliktok Pipeline is switching from natural gas liquids to natural gas transportation, moving natural gas west from Prudhoe Bay to Kuparuk for use to fuel power equipment.
On Aug. 2 the Regulatory Commission of Alaska granted a July 1 petition from Oliktok to suspend NGL transportation service and resume natural gas transportation service effective Sept. 1.
In the July 1 petition Oliktok said it currently provides NGL transportation service. Its NGL transportation customers have indicated they will not need that service after Aug. 1 and are requesting that Oliktok instead provide natural gas transportation beginning Sept. 1.
The line has carried either NGL or natural gas since it began service in the mid-1980s.
Oliktok, 100% owned by ConocoPhillips, is a 16-inch line originating at Skid 50 at Prudhoe, near trans-Alaska oil pipeline Pump Station 1 and terminating at Central Processing Facility 1 at Kuparuk, some 28 miles. The line began service in 1985 transporting natural gas, a service it provided for three years. The line’s temporary certificate of public convenience and necessity was subsequently suspended. In 1995, when NGL service was requested, Oliktok requested a permanent certificate covering both NGL and natural gas transportation.
The line transported NGL from Prudhoe to Kuparuk for injection into the Kuparuk reservoir from 1995 through 2013. Shippers then requested transportation of natural gas from Prudhoe to Kuparuk, a service the line provided through 2017, resuming NGL shipment in 2018 when shippers requested that service.
The Kuparuk operator has now requested natural gas shipment to Kuparuk beginning Sept. 1, Oliktok said. There are no shippers who will require NGL transportation in the foreseeable future, the pipeline told RCA in its petition.
Oliktok said it is not requesting permanent discontinuance of NGL service, as shippers may require that in the future.
Rates proposed are 51 cents per thousand cubic feet from Skid 50 at Prudhoe to CPF1 at Kuparuk and 38 cents per mcf from Skid 50 to the Milne Point product pipeline connection.
Oil Search interest The commission received a comment on the filing from Oil Search (Alaska), which said it had notified Oliktok in January that it was interested in becoming a shipper of natural gas on the line, with estimated volumes upwards of 50 million standard cubic feet per day beginning “in or around 2025.”
In its January letter to ConocoPhillips, Oil Search said that as Pikka unit operator it “intends to consider long-term arrangements to acquire natural gas on the Alaska North Slope,” possibly from Prudhoe, and “would anticipate a need to transport the gas for use in Pikka Unit operations and possibly other nearly oil and gas operations.”
Oil Search said it understands Oliktok “intends to soon offer the east to west transport of gas in response to a change in demand of current shippers, primarily the Kuparuk River Unit working interest owners.”
DNR approval Oliktok also needs approval from the Department of Natural Resources’ Division of Oil and Gas State Pipeline Coordinator’s Section, which public noticed the application July 21. No addition right-of-way acreage will be required, the section said, but the lease requires DNR approval for the pipeline to transport other products, approval which, it said it intends to give. Comments on the proposal are due Aug. 20.
Oliktok applied to the section June 15 for conversion of service to fuel gas.
The pipeline said required work for the return to fuel gas service will be carried out between Kuparuk and Skid 50 by Oliktok’s operator, ConocoPhillips Alaska, with the Skid 50 work performed by Prudhoe operator Hilcorp.
Oliktok said it would submit an updated quality assurance program and surveillance, monitoring and maintenance program at least 30 days prior to transporting fuel gas. Oliktok said shippers notified it on Jan. 19 that they intended to cease NGL shipments Aug. 1 and requested Oliktok to begin permitting and regulatory approval necessary from the change from NGL to fuel gas shipment.
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