Work well under way on Exxon's long-awaited Alaska project

Wesley LoyPetroleum News

ExxonMobil is starting to make real strides on its Point Thomson hydrocarbon development on the North Slope. 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.

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

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

Kim Jordan, an ExxonMobil spokeswoman in Houston, said 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 project design calls for three drill pads, with the central pad to host the process and compression equipment needed to produce gas condensate. The 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 a 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 ice road. ExxonMobil this year built an ice road from the west that was open from February until late April.

In 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.

A vital component of the Point Thomson project is a new 22-mile pipeline that will carry the liquids west to Badami, a former BP unit now operated by Savant Alaska. From there, the liquids will move through the Badami pipeline and ultimately to the trans-Alaska oil pipeline.

The Point Thomson line will be above ground and insulated, and will rest on brackets known as "vertical support members," or VSMs.

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.

The 12-inch export pipeline is designed for a capacity of 70,000 barrels a day. 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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