Friday, May 17, 2013

Work on the ground well under way on Exxon’s long-awaited Alaska project

Wesley Loy
For Petroleum News

ExxonMobil is starting to make real strides on its Point Thomson development on Alaska’s North Slope.

Construction contractors for the oil giant have been focusing on two project components — the central pad, and the pipeline that will tie the field into the existing North Slope oil transportation network to the west.

ExxonMobil is aiming to begin production of natural gas condensate, a light hydrocarbon liquid, by May of 2016.

The initial production level is expected to be 10,000 barrels a day, a small volume in the context of overall North Slope oil production, which currently exceeds 550,000 barrels daily.

But the project is regarded as a key first step toward a potential multibillion-dollar effort to fully exploit one of North America’s largest undeveloped oil and gas fields.

ExxonMobil has two major partners in the field, BP and ConocoPhillips.

The Australian firm WorleyParsons, along with Fluor, is providing overall project management.

Central pad camp set up

Kim Jordan, an ExxonMobil spokeswoman in Houston, told Petroleum News on May 15 that modules for a permanent work camp were placed on their foundations at Point Thomson’s central pad in April.

The work camp was built at a fabrication yard in the Anchorage area, she said.

More infrastructure development is planned for the summer, including the commissioning of the camp, completion and certification of an airstrip, and installation of a permanent service pier, Jordan said.

The field hugs the shore of the Beaufort Sea, about 60 miles east of Prudhoe Bay and just west of the Arctic National Wildlife Refuge.

The project design calls for three drill pads, with the central pad to host the process and compression equipment needed to produce the gas condensate. These heavy industrial modules are not yet on the North Slope as ExxonMobil focuses for now on basic site preparation.

Two wells have been drilled on the pad already, and are in suspended status.

ExxonMobil will produce the condensate through a process known as cycling, where natural gas is brought to the surface for collection of the liquids. The dry gas will then be shot back underground for storage. The project is expected to cycle 200 million cubic feet of gas per day.

It’s a challenging project, for a number of reasons.

The Point Thomson site is remote, and materials and equipment must be brought in by coastal barge or by ice road. ExxonMobil this year built an ice road from the west that was open from February until late April.

With respect to production, ExxonMobil will have to contend with very high pressures in the Point Thomson reservoir. The company says 10,000 pounds per square inch of compression will be required to reinject the gas.

The export pipeline

A vital component of the Point Thomson project is the new 22-mile export pipeline that will carry the liquids production west to Badami, a former BP unit now operated by Savant Alaska. From there, the liquids will move through the Badami pipeline and ultimately end up in the trans-Alaska oil pipeline. The Point Thomson pipeline will run along the coast to Badami. Like many pipelines in the North Slope oil fields, the Point Thomson line will be above ground and insulated, and will rest on brackets known as “vertical support members,” or VSMs.

Graham Smith, spokesman for the State Pipeline Coordinator’s Office, said lease compliance specialists made three trips to the Slope to check on the pipeline work, which just wrapped up for the season.

“Definitely making some serious progress,” Smith said. “All the VSMs are hammered in.”

The next step will be to lay the actual pipe, and that should occur next winter, he said.

The straight pipe already is in Alaska, stockpiled in Fairbanks, Smith said. The bends have yet to be delivered.

Jordan, the ExxonMobil spokeswoman, said workers installed about 2,200 VSMs. She confirmed that the export pipeline and gathering line will be installed next winter.

The 12-inch export pipeline will feature a design capacity of 70,000 barrels per day, well above the 10,000 barrels per day of condensate ExxonMobil expects to produce initially. The surplus capacity will accommodate fuller Point Thomson development, and maybe production from other eastern North Slope developments.

The budget for the pipeline alone is $253 million, ExxonMobil has said.

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