Pipeline trips – September 11, 2022

On September 2, the State Pipeline Coordinator’s Section of the Oil and Gas Division of the Alaska Department of Natural Resources issued a public notice for the Commissioner’s analysis and proposed decision on right-of-way lease ADL 421843 for the Pikka sales pipeline.

The DNR Commissioner’s preliminary conclusion was that the plaintiff, Oil Search (USA), or OSU, is fit, willing, and able to construct, operate, maintain, and terminate the Pikka Sales Pipeline Project in the under an AS 38.35 ROW lease as described in their application. and additional information. This is a major step forward for the development of Pikka as it could lead to one of the last major clearances required for the project.

Akis Gialopsos, acting commissioner of the DNR, signed the analysis and the decision proposal, a 44-page document.

Editor’s note: See the map for this story in the PDF of the online issue.

On Feb. 1, OSU submitted Alaska Statute 38.35, or ROW, non-exclusive right-of-way application to construct and operate a 16-inch-diameter Pikka Sales Pipeline on state land. of Alaska for the purpose of transporting commercial grade oil from the Nanushuk Processing Facility, or NPF, in the Pikka Unit to a Connection Point, or TIP, near the Kuparuk Pipeline Extension, or KPE , and a 12 inch diameter pipeline from TIP to KPE, all on the Alaska North Slope.

The approximately 22-mile pipeline will be placed on shared pipeline supports with pipelines authorized by ADL 421723 under AS 38.05.850 for an 8-inch gas pipeline and a 16-inch seawater pipeline, along with the cables electrical and associated fiber optics.

The surface sale petroleum line will be approximately 7 feet above the tundra surface. OSU requested a 300-foot-wide construction right-of-way, tapering to a 60-foot right-of-way for operations.

The pipeline will begin in the Pikka Unit, passing through Ununited State Lands, the newly formed Quokka Unit, Southern Miluveach and Kuparuk River Units.

Built to North Slope industry standards, the pipeline will operate at a maximum operating pressure of 1,480 pounds per square inch, transporting 80,000 barrels of oil per day during Pikka’s Phase I, which Santos, the owner of OSU and the operator of Pikka Oil Search (Alaska) (51%), recently sanctioned in collaboration with its 49% partner Repsol. Pipeline throughput could be increased in the future if working interest owners proceed with additional phases of the Pikka Project.

Project schedule, construction

According to the DNR, the applicant OSU proposes to begin construction of the Pikka Sales Pipeline in the fourth quarter of 2023 with initial construction of an ice shelf and ice road to support the construction of the pipeline. Construction of the pipeline is proposed to begin in the first quarter of 2024 and delivery of start-up oil is proposed for 2025, although Santos and Repsol recently said start-up would likely take place in 2026.

The pipeline will be supported by shared horizontal and vertical support members (“HSM” and “VSM”) spaced approximately 55 to 60 feet in accordance with North Slope industry standards.

Along the designated route, the pipeline will intersect with other pipelines, pipeline supports and roads. At road crossings, the pipeline will be installed inside a steel casing designed to minimize sedimentation and water accumulation and to allow visual inspections.

During construction, temporary ice pads and roads will be accessible via existing gravel pads, roads and temporary ice pads.

The unheated pipeline will carry commercial oil between 130 and 150 degrees Fahrenheit. The steel pipe will be coated with fusion bonded epoxy, 3 inch polyurethane foam insulation and covered with a 24 gauge sheet metal jacket per North Slope industry standards.

The 24 gauge sheet metal jacket will have a non-reflective finish to reduce potential wildlife impacts associated with reflection.

All powers are commissioners

The Right-of-Way Lease Act (Alaska Statute 38.35) sets forth the procedures governing an application for an oil or gas pipeline right-of-way through state lands.

Under this Act, the Commissioner of the DNR is granted all necessary powers to lease state lands for pipeline right-of-way purposes.

In leasing the land, the commissioner must conclude in writing that the applicant is fit, willing and able to perform the transportation or other proposed acts in a manner that will be required by the present or future public interest.

In addition, before granting a right-of-way lease, the commissioner is required to prepare an analysis of the application.

No public comments received

Public notice of the February 1 application began on February 17 and ended on April 18. Notice of the application was published in two newspapers, on the State of Alaska Public Notice website and on the division’s website; and sent to post offices in Nuiqsut, Utqiaġvik and Prudhoe Bay. Notices have also been sent to Coordinating Agencies (as defined by AS 38.35.230), Private Landlords, Third Party Interest Holders, Government Agencies/Entities, and Alaska Native Claims Settlement Regional and Village Corporations Act (ANCSA) near the proposed site. pipeline. Full copies of the request were sent to the Tuzzy Consortium Library in Utqiaġvik, the Nuiqsut Community Library, and the ZJ Loussac Library in Anchorage.

No public comments on the Notice of Application were received.

Last public comment period

The final public comment period for the Commissioner’s Notice of Analysis and Proposed Ruling on Right-of-Way Lease ADL 421843 for the Pikka Sales Pipeline begins September 2 and ends October 7 at 5:00 p.m.

Written comments can be emailed to: [email protected] or faxed to 907-269-6578 or submitted by U.S. Mail or delivered in person to Alaska Department of Natural Resources, Division of Oil and Gas, State Pipeline Coordinator’s Section, 550 W 7th Ave ., Suite 1100, Anchorage, AK 99501-3563.

MNR will hold three public hearings; the first on October 5, either as an in-person hearing in the Nuiqsut community or online, as the city determines is best for the community. Details of this hearing will be available at:

https://dog.dnr.alaska.gov/Services/Pipeline/Pikka_Sales_Oil_Pipeline.

The other two hearings will be online on October 7 at 12 p.m. and 6 p.m. Information on how to connect to these online public hearings will be available at:

https://dog.dnr.alaska.gov/Services/Pipeline/Pikka_Sales_Oil_Pipeline.

For questions about how to participate in the public hearings, contact Tammas Brown at 907-269-6468, or [email protected]

The preliminary conclusion of this MNR Commissioner is subject to further consideration of all comments submitted during the public comment period for this decision.

The candidate

According to the Commissioner’s analysis, Oil Search Limited, or OS, acquired and assumed operation of the oil leases for the Nanushuk oil field in the Pikka unit in 2018 through its subsidiary Alaska Oil Search ( Alaska) LLC. OSA was incorporated as a company doing business in Alaska on November 15, 2017.

Since 2018, OSA has continued to invest in the Pikka project through exploration activities such as 3D seismic mapping and drilling. As a result of these activities, the OSA gained confidence in the reserves and as a result increased its involvement in the region.

OSA is a wholly-owned subsidiary of Oil Search (USA) Inc., or OSU, the candidate for the lease of the Pikka pipeline right-of-way, which is a wholly-owned subsidiary of Santos Limited, following a a merger of its former parent company, OS, in 2021, which made OS a subsidiary of Santos.

OS underwent a merger when Santos acquired 100% of OS’s issued share capital from shareholders. New shares under Santos were issued on December 14, 2021, with the merger taking effect on December 17, 2021.

OS was retained as an unlisted subsidiary of Santos

Proposal for a decree on minerals

Mineral Order 1264 is noted along with the Commissioner’s September 2 analysis and proposed decision on the Pikka Oil Line Right-of-Way Lease.

In accordance with AS 38.05.185(a) and AS 38.05.300(a), the MNR Commissioner may close lands at the entrance of minerals greater than 640 acres if the closure is related to infrastructure or corridors of transport, in which the entry of minerals is an incompatible use that would adversely affect the proposed use of the surface.

Although there has been little interest and little exploration for minerals on the North Slope, and no major mining or placer operations have taken place, activities associated with the location minerals are not compatible with the safe operation or stability of hydrocarbon transmission pipelines, the commissioner wrote.

Oil and gas exploration and production is highly developed in the region and transportation to market, such as transportation through the Pikka Sales Pipeline, is crucial, he wrote.

Proposed Minerals Ordinance 1264 would close a 300-foot-wide corridor to mineral entry and development, measured 150 feet on either side of the right-of-way control line, the commissioner wrote.


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