Nutaaq Pipeline has filed a revised tariff rate with the Regulatory Commission of Alaska for the Badami Oil Pipeline, which carries crude oil from Badami to a connection at Endicott. Oil then goes on to the trans-Alaska pipeline and south to market.
Nutaaq, owned by Glacier Oil and Gas, has a tariff rate of $2.71 per barrel; it is requesting an increase to $20.60 per barrel for November and December.
The pipeline told RCA that the increase “will not prejudice or harm Nutaaq’s customers, who are aware of the circumstances necessitating this filing, or the public interest” and said it anticipates that the rate revision is only for November and December.
The blended rate for 2016, including the increase, would be $5.61 per barrel, lower than the blended rates for 2015 and 2014 by 19 percent and 39 percent respectively, Nutaaq said.
The pipeline said it anticipated filing a revised rate for 2017 soon and said that rate is expected to be about $3 per barrel or some 30 percent lower than the blended 2016 rate.
Reason for increase
Nutaaq said the tariff increase is mainly due to an approximately 63 percent decrease in expected volumes from PTE Pipeline, which could not be offset by a reduction in operating costs of some 23 percent.
“Volumes from PTE Pipeline LLC have not been near the 5,000 barrels per day previously estimated, and upon which prior rates in 2016 were based. PTE oil shipments have approached zero as their facility has experienced material start-up issues,” Nutaaq told RCA.
The pipeline said its existing rate was based on the addition of throughput from PTE Pipeline beginning June 1.
The filing is a mid-year correction, Nutaaq said, and is based on dividing the original cost of service, net of throughput revenues through the end of October, by the revised throughput estimated for November and December.
“The mid-year correction methodology will allow Nutaaq to achieve its 2016 cost of service based upon the revised throughput production,” it told RCA.
Production volumes
Point Thomson production, based on data available from the Alaska Oil and Gas Conservation Commission beginning with field startup in April, totals some 148,000 barrels, with monthly totals ranging from almost 48,000 barrels in April to some 7,900 barrels in May, then rising to more than 21,000 barrels in June, almost 33,000 barrels in July and more than 38,000 barrels in August.
AOGCC data, available on a month-delay basis, and currently available through August, breaks production down by field and pool.
Based on that data, Point Thomson has averaged fewer than 1,000 barrels per day since startup, with a high of almost 1,600 bpd in April and a low of 255 bpd in May, and the bpd volumes gradually rising to 1,230 bpd in August.
Production began at Point Thomson April 2 and ExxonMobil told Petroleum News in an Oct. 27 email that the facility was designed to produce up to 10,000 bpd of natural gas condensate and inject up to 200 million cubic feet of recycled gas for future recovery.
The facility started up with an initial production rate of some 5,000 bpd of condensate and 100 million standard cubic feet per day of recycled gas, the company said.
“Since Point Thomson’s startup in April 2016, we continue to finalize dynamic commissioning of the gas injection compressor system. During this time, daily production will fluctuate. We will safely ramp up production once these activities are complete,” ExxonMobil said.
