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Vol. 20, No. 38 Week of September 20, 2015
Providing coverage of Alaska and northern Canada's oil and gas industry

An exciting time

Quarles talks of ExxonMobil’s commitment to both Point Thomson, AKLNG


Petroleum News

Commenting that Point Thomson, when it goes into production, will be the first field on Alaska’s North Slope to be operated by ExxonMobil, Cory Quarles, ExxonMobil Alaska production manager, told a Sept. 10 meeting of the Alaska Support Industry Alliance that this is an exciting time in the state for his company. The Point Thomson development is at an advanced stage.

ExxonMobil is also a partner in the Alaska LNG project, or AKLNG, a project to export natural gas from the North Slope through an LNG facility on Cook Inlet. Quarles said that, with ongoing negotiations over the project in progress, there was little he could say about the project at present. A deal over the project depends on many factors, including regulatory certainty, fiscal stability, commercial terms and commodity prices, he said.

“But even with all of that, I can say that we are the closest that we’ve ever been,” Quarles said. “And that’s good news, because it gives us the potential to be able to work with all of you to create more jobs for Alaskans.”

Gas cycling initially

With the Point Thomson field’s massive reservoir holding about 8 trillion cubic feet of natural gas, ExxonMobil is developing the field in two phases, Quarles said. The first phase is a $4 billion project to recycle 200 million cubic feet of gas per day through the reservoir and hence produce 10,000 barrels per day of gas condensate, he said. The condensate will be separated from the gas in surface facilities, with the condensate delivered into a pipeline for export to the trans-Alaska oil pipeline, while the gas is compressed for re-injection into the reservoir.

At Point Thomson this apparently simple process is very challenging because of the exceptionally high reservoir pressure of more than 10,000 pounds per square inch, Quarles said. The field design had to accommodate a gas/condensate separator pressure higher than anywhere else in ExxonMobil’s global portfolio, with the gas injection pressure also being the highest in that portfolio, he said. The huge production modules for the field have just been delivered to the North Slope, and commissioning and hookup of these facilities is underway. The largest of the modules is about half the size of a football field, Quarles said.

“I’m glad to say that we are on track to be under budget and also on schedule for startup in early 2016. That’s a significant accomplishment that we all were a part of,” he said addressing an audience largely from Alaska oil industry service companies.

Flawless execution needed

Quarles said that Point Thomson is located in an extremely remote area, with no support infrastructure, about 60 miles east of Prudhoe Bay. Developing the field requires flawless project execution, “doing the right work, the right way, at the right time, in order to get the right results,” he said. But that does not necessarily make ExxonMobil the easiest company to work with, he conceded.

“Easy is not one of our core values,” he said. “Safety is. The environment is. Developing people is. And every day we try to do better than our best.”

Quarles said that ExxonMobil conducts meticulous planning prior to commencing work on the ground and takes great care over the companies that it works with.

“Since the beginning of the Point Thomson project we’ve had 99 Alaska companies involved in the project,” he said, adding that 80 percent of the workers had come from Alaska.

The world of the oil industry is one where safety leadership and emergency preparedness are necessities rather than choices, and where it is necessary to always be prepared for the worst case scenario, Quarles said. He said that he joined ExxonMobil several years after the Exxon Valdez oil spill disaster in Prince William Sound.

“I was told that it was a turning point for Alaska and I was also told that it was a turning point for ExxonMobil,” Quarles said.

The tragedy of Exxon Valdez had caused ExxonMobil to develop its operations integrity management system, a system designed to make sure that the company’s operations protect people and the environment, making sure that people working on company projects and operations remain safe, he said.

“My biggest fear is having to go to the house of a colleague and go to their family and tell them their loved one is not coming home,” Quarles said.

Citing an incident in the North Sea, where people working for ExxonMobil had assisted personnel from another company during an emergency resulting from a severe storm, Quarles said that his company takes a very hands-on and caring approach to the training of both its employees and its contractors.

“We foster a safety culture where everyone who steps foot on Point Thomson and sets foot on that site, they recognize that Point Thomson is a place where nobody gets hurt,” Quarles said.

With Point Thomson holding about a quarter of the proven natural gas resources on the North Slope, Quarles characterized the field as a pillar supporting the AKLNG project. ExxonMobil has previously said that if the AKLNG project comes to fruition, a second phase of the Point Thomson project will involve the offtake of gas from the field. But the AKLNG project is “a massive, massive project,” with a price tag in the range of $45 billion to $65 billion, Quarles said.

“That’s the largest investment of its kind in U.S. history,” he said.

All of the parties involved in the project are doing their due diligence, to make sure that they can make this project work both for Alaskans and for company shareholders, Quarles said.

“Similar to Point Thomson, the success of Alaska LNG depends on all of us working together,” he said.

Quarles asked the people in the Alliance audience for their support in moving projects forward.

“Alaska’s future is full of potential and the initial phase for the Point Thomson project is just an example and a precursor for what’s to come,” Quarles said. “I want you to walk away from here with confidence that ExxonMobil is here for the long term and we have the global experience to make Point Thomson a role model for oil and gas operations in Alaska.”

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