|
Settlement talks for Point Thomson tariff Conoco intervenes; companies, state negotiating; Regulatory Commission of Alaska gives parties 60 days, requires report KRISTEN NELSON Petroleum News
The Regulatory Commission of Alaska has granted a request by PTE Pipeline LLC, ConocoPhillips and the state for 60 days to continue settlement negotiations over the tariff for the line which will carry condensate from Point Thomson to Badami.
PTE Pipeline LLC, owner of the Point Thomson Export Pipeline, is owned 68 percent by ExxonMobil Pipeline Co. and 32 percent by BP Transportation (Alaska) Inc. PTE Pipeline filed a tariff with RCA Sept. 15, proposing $20.39 per barrel for transportation to Badami. The Alaska Department of Law protested the tariff in an Oct. 5 filing; In a Nov. 12 order RCA suspended the tariff rate and rules filed by PTE Pipeline for an initial six-month period and established a temporary rate equal to the filed rate, “to be collected subject to refund with interest.”
ConocoPhillips Alaska filed Nov. 24 to intervene, noting that it will be a future shipper and “therefore has a direct financial interest in the outcome of the proceedings.”
Statements from a transcript of a prehearing conference Nov. 30, during which the parties asked for a 60-day window, indicated the parties were involved in settlement discussions which they believed would narrow if not eliminate the issues identified in the state’s complaint.
Parallel FERC proceeding The RCA proceeding covers the intrastate tariff; the Federal Energy Regulatory Commission has a parallel proceeding on interstate rates. Settlement negotiations are underway for both proceedings.
The parties requested Jan. 29 as the date to provide a status report to RCA.
The parties also said that if they are making progress in the settlement negotiations they would continue to ask that proceedings at both RCA and FERC be suspended until the parties either settle or conclude that they cannot reach settlement on all issues.
RCA order In a Dec. 9 ruling RCA affirmed the Nov. 30 ruling by the administrative law judge granting ConocoPhillips’ petition to intervene, and granted the request of all parties that proceedings be held in abeyance until a status report on settlement negotiations is filed on or before Jan. 29.
In early November RCA approved a permit for interconnection of ExxonMobil’s Point Thomson unit production facilities to the Point Thomson Export Pipeline System.
PTEP is a 22-mile common carrier pipeline which will transport liquids from Point Thomson to the Badami central processing facility. PTEP is already connected to the Badami Pipeline, which is connected to the Endicott Pipeline which is connected to the trans-Alaska oil pipeline.
The applicants told RCA in the connection application that ExxonMobil, the Point Thomson field operator, intended to begin transporting petroleum through the connection in the 2015-16 winter season.
PTE Pipeline answer PTE Pipeline responded Nov. 30 to the state’s complaint about the proposed tariff (see story in Oct. 11 issue), saying it does not object to the state’s request for an investigation into the justness and reasonableness of the proposed rates, or to the state’s proposal that RCA suspend the initial rates and allow them to be collected subject to refund.
PTEP said the state used a superseded throughput, 5,000 barrels per day, rather than the 5,800 bpd PTEP used in its calculations. It also says the state argues the initial rate will “be indefinitely applied.”
“PTEP does not assume that it will use its present throughput figures to set rates indefinitely,” the company said, but “will be in a position to adjust its rates to reflect changes in throughput, should they occur.”
On some issues which the state raised PTEP said they were “typical rate case issues” and would be “further explored in these proceedings, in which additional information will be provided by PTEP.”
The state argued that an allowance for dismantlement, removal and restoration should be deposited in a separate fund. PTEP said DR&R obligations are imposed in the state’s right-of-way lease for the pipeline and PTEP should not be required to deposit those monies in a separate fund because PTEP’s owners have already submitted a guarantee “that they will perform DR&R obligations when they come due.”
Modules have arrived ExxonMobil said in early September that processing modules for the Point Thomson field had arrived by barge from Korea and that installation of the modules would keep the project on scheduled for an early 2016 startup.
Point Thomson, some 60 miles east of Prudhoe Bay, contains natural gas and condensate at exceptionally high pressure and that pressure must be maintained for optimum production of the condensate. The initial production system at the field will use two gas injection wells and a single production well. Compressors will recycle gas back into the reservoir once condensate is removed.
The initial production system is designed to produce up to 10,000 bpd of condensate.
Point Thomson contains an estimated 8 trillion cubic feet of natural gas and is planned to be part of the natural gas produced in the Alaska LNG Project.
| 