Point Thomson gets approval from Corps


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A worker prepares molten gold at the Nixon Fork ore mill near McGrath. Production at the mine resumed in mid-2011, and Fire River Gold Corp. expects to produce 30,000 ounces of gold during 2012. The ore mill at Nixon Fork is achieving about an 85 percent recovery rate for gold, an encouraging step for the company.

Courtesy Fire River Gold Corp.

The U.S. Army Corps of Engineers issued its record of decision and a Section 404 dredge and fill permit for ExxonMobil’s big Point Thomson gas project Oct. 26, but the company said it is still working to secure additional permits before saying it can begin construction this winter.

That is expected, however, if the multi-billion dollar project is to stay on schedule for completion in 2016.

The Corps’ approval came 11 days after an Oct. 15 deadline that ExxonMobil had set internally as the latest it could wait on ordering contractors to mobilize. Originally the Corps had hoped to get the decision made in mid-September.

The approval gives ExxonMobil permission to drill three large gravel pads at Point Thomson, one which will be the site of large processing facilities and the other two mainly to support production and injection wells. There will also be 10 miles of in-field gravel roads, an airstrip, barge docking facility, and in-field pipelines.

There will also be a 23-mile pipeline that will connect with the existing Badami pipeline that extends about 25 miles east of Prudhoe Bay to the small Badami oil field.

If contractors are mobilized, the work this winter will include the construction of gravel pads, roads and airfield and the installation of Vertical Support Members for the pipeline, which will be built next year.

Point Thomson is about 60 miles east of Prudhoe Bay. It is a large natural gas deposit with about 8 trillion cubic feet of reserves proven by drilling, with an additional estimated 200 million barrels of liquid condensates, a gas liquid that is held within the gas reservoir.

There are also known conventional oil accumulations in the area.

ExxonMobil’s plan is to build a gas cycling project that would “strip off” about 10,000 barrels per day of condensates, shipping them by pipeline to the Trans Alaska Pipeline System at Prudhoe Bay, where they would be blended with the crude oil in the pipeline.

The gas that is produced would be injected back underground. One of the technical challenges of the project is that the Point Thomson reservoir is at very high pressure, about 10,000 pounds per square inch, about twice the original reservoir pressure of the Prudhoe Bay field.

Injecting the produced gas back underground into the high pressure reservoir will require huge compressors, some of the largest and most powerful ever built.

The construction project will be one of the largest in years for the North Slope and will be welcomed by contractors at a time when North Slope work has been somewhat slow.

The large modules will be built outside Alaska and moved to the slope by sealift, which is customary for large oil projects, but inevitably there will be a lot of smaller facilties and support units built in the state. Also, the assembly and hooking-up of the module units will require substantial amounts of on-site labor.

There is some uncertainty that the gas cycling in the reservoir will work as expected.

If it does work, the project could be scaled up to produce larger volumes of liquid condensates. If it doesn’t work the facilities could also become a conventional large gas production project supporting a conventional gas pipeline, or alternatively, shipping gas to Prudhoe Bay to use in pressurizing the reservoir there for more oil production.

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