Slope gets busy from CD-5 to Point Thomson


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Dustin Cook, a welder for NANA Development Corp., works on a new gas processing module on April 14 at the NANA fabrication shop in Big Lake. The module was built for BP’s North Slope Gathering Center 2 to increase gas handling capabilities as part of a longer-term $3 billion project BP is studying in the western Prudhoe Bay field. Slope producers outlined several major projects now planned or underway to legislators on April 8 in Juneau that are estimated to add some 60,000 barrels of new production per day by 2018.

Photo/Michael Dinneen/AJOC

JUNEAU — North Slope oil fields are busy places these days. ConocoPhillips told a state legislative committee in Juneau that it expects to see 50,000 barrels per day of new North Slope production in 2018 based on projects now under construction and planned.

Field operators also have extensive maintenance and facility “renewal” projects underway for the oilfields, a panel of company managers told the Senate Resources Committee April 8.

Those include construction of a replacement for a field pipeline carrying seawater for field pressure maintenance in the Kuparuk field, and major “turnaround” maintenance projects planned this summer for three major production facilities in the Prudhoe Bay field.

Construction o one new project, CD-5 near the producing Alpine field, is also now under construction, and will be producing 16,000 barrels per day beginning in late 2015, Scott Jepsen, the company’s vice president for external affairs, told the Senate Resources Committee in Juneau.

Two of ConocoPhillips’s new projects planned — a new drillsite in the Kuparuk field and a new production pad in the northeast National Petroleum Reserve–Alaska — must still get the approval of the company’s board but the company has moved ahead with gravel placement for the Kuparuk field drillsite this winter.

That project alone employed 70, Jepsen said.

A third project is a planned expansion of a viscous, or heavy, oil project in the Kuparuk River field, Jepsen said. Investment in the ConocoPhillips-managed projects will total $2 billion by the company and its partners.

Jepsen was part of a panel of industry and state officials who briefed the legislators on the outlook for new production from the North Slope.

Meanwhile, ExxonMobil will also have its Point Thomson field completed and producing 10,000 barrels per day, or b/d, of liquid condensates by 2016, Sofia Wong, the company’s infrastructure manager for its Point Thomson project, told the legislative committee.

Point Thomson is a large gas and condensate field east of Prudhoe Bay. The condensate project is a preliminary step toward production of the gas, Wong said.

The Point Thomson costs are pegged at $4 billion and to date ExxonMobil and its partners in the field, BP and ConocoPhillips, have spent $2 billion, she said.

Including Point Thomson, that would bring total new production to 60,000 b/d on the Slope by 2018.

On the planned summer maintenance at Prudhoe Bay, BP will shut down three of the field production facilities at intervals in July and August to perform scheduled maintenance and upgrades, Frank Paskvan, BP’s Alaska technology manager, told the Senate Resources Committee.

Work will be performed in the field’s Central Gas Facility, Flow Station 3 on the eastern side of Prudhoe Bay and Gathering Center 2 on the western side, Paskvan said.

The Central Gas Facility is one of two major gas-handling plants at Prudhoe Bay. It processes about 7 billion cubic feet per day that is currently being produced with crude oil, removes gas liquids from the raw gas and sends it on to a second plant, the Central Compressor Plant, where the gas is injected back into the reservoir for pressure maintenance.

The work involves refurbishing and upgrading compressors, heat exchangers and valves and will include other process and safety improvements. Two years have gone into planning the work, and costs are estimated at $76 million.

Also, a new process module will be added to Gathering Center 2 to increase the facility’s gas-handling capabilities. This would prepare the facility to be part of a longer-term $3 billion project BP is planning for the western part of the Prudhoe field, but that project is still under study.

Paskvan told the legislators BP hopes to start production at its new west Prudhoe Bay project in 2018, which will have a peak production of 40,000 barrels per day. The project will also include an expansion of two other drillsites.

The GC-2 module has just been completed at a fabrication plant in Southcentral Alaska operated by NANA Development Corp. and will be trucked to the North Slope this spring.

Alaska Deputy Revenue Commissioner Bruce Tangeman, said the new projects will essentially stem the decline of the producing North Slope fields for a period. The North Slope is now producing about 530,000 barrels per day.

Tangeman said the state revenue department has calculated that increased activity on the slope will add 13,600 barrels per day of production this year over an estimate made by the state in early December.

The 2014 increase will be enough to stem the decline of the field from 8 percent between 2012 and 2013 to a projected decline of 1.8 percent between 2013 and 2014, Tangeman told the legislators. The long-term decline on the slope has been 6 percent, he said.

The state’s latest production estimate is for a 2 percent decline next year and 1 percent in 2016 but the ramp-up of industry activity, which he credited to a change in state tax laws, “is making it happen a lot faster than we had thought,” Tangeman said.

The 2014 summer maintenance shutdowns at Prudhoe Bay will cause temporary interruptions in North Slope production, however Prudhoe Bay is currently producing about 325,000 barrels per day, according to Alaska Department of Revenue production statistics, but output typically drops during summer because field plants are less efficient in warmer weather.

Tim Bradner can be reached at tim.bradner@alaskajournal.com.

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