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AOGCC OKs Greater Moose’s Tooth metering
KRISTEN NELSON Petroleum News
The Alaska Oil and Gas Conservation Commission has approved a request by ConocoPhillips Alaska Inc. for a meter allocation factor of 1.0 for its Greater Moose’s Tooth 1 development.
This approval is a continuation of the commission’s consideration of ConocoPhillips’ request for a waiver of regulatory requirements for metering production from GMT1, required because the company is not constructing production facilities at GMT1, but instead moving production to the Alpine Central Facilities at the Colville River unit for processing.
In October AOGCC approved ConocoPhillips’ request for a waiver of regulatory requirements allowing for fiscal allocation of production from GMT1 to be based on a metering system that does not meet custody transfer quality standards (see story in Oct. 23 issue of Petroleum News).
In February 2016 the company had requested waivers to allow it to use a coriolis-based metering system at GMT Pad 1 to allocate unit production, which would then be commingled with Colville River unit production at CD5 and shipped to the Alpine Central Facilities for processing. ConocoPhillips proposed installation of a single-stage three-phase separator for production leaving GMT1, with the oil leg coming off the three-phase separator metered with a coriolis meter and water cut analyzer and the gas legs metered by orifice meters. After metering at GMT1 the oil and gas streams would be recombined before being shipped to CD5 and commingled for processing at Alpine.
The commingled production would then be metered at the CRU lease automatic custody transfer sales meter before shipment to market.
The allocation factor ConocoPhillips also requested an allocation factor of 1.0 for GMT1 which, the commission said in its October order, assumes that the GMT1 metering system is 100 percent accurate. “Any error in that system would be applied to CRU production,” the commission said, resulting in one unit over reporting production while the other unit under reported.
“Since the landownership of the two units is different this would result in landowners being over or under paid for royalties for production from their lands,” the commission said.
The commission did not approve the allocation factor in October, saying: “There is insufficient information available at this time to demonstrate that the mineral rights owners of the two units fully understand the implications of assigning a fixed allocation factor to one unit while the other unit has a floating allocation factor and thus the AOGCC needs to gather more information before a decision on the GMT1 allocation factor can be made.”
Working interest owners at GMT are ConocoPhillips and Anadarko Petroleum; CRU WIOs are ConocoPhillips, Anadarko and Petro-Hunt. Landowners at GMT are the federal Bureau of Land Management and Arctic Slope Regional Corp.; CRU landowners are the Alaska Department of Natural Resources, BLM and ASRC.
The commission held a hearing on the allocation factor Nov. 17, with testimony from ConocoPhillips and the Alaska Department of Revenue. It extended the hearing for comments and answers to questions, which it received from BLM, ASRC, ConocoPhillips, DNR and DOR.
Comments from parties The commission said all of the potentially affected parties provided comments that supported - or at least did not object - to a metering factor of 1.0 at GMT1.
“Since none of the potentially affected parties believe they’ll be adversely impacted if the meter allocation factor is set at 1.0 there is no reason for the AOGCC to reject CPAI’s request to set the GMT1 meter allocation factor to 1.0,” the commission said.
AOGCC has not yet approved a request for the custody transfer metering of natural gas sold to GMT1 from the Colville River unit after the gas is severed from CRU - ConocoPhillips requested that the gas be metered once it reaches GMT1, rather than when it leaves the Colville River unit. The commission denied, without prejudice, that request, and said ConocoPhillips can renew the request when it can provide additional evidence in support.
AOGCC requires that the specific design of the fiscal allocation metering system be approved by the commission before it is installed and operated, as would the specific design of the gas measuring system.
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