A July 17 application by BP to the Alaska Oil and Gas Conservation Commission for amendments to area injection orders for the Prudhoe Bay field marks a critical step toward the possibility of building a major gas pipeline for the export of natural gas from the North Slope. The application requests approval for an increase in the maximum amount of gas that can be withdrawn from the field and approval to inject additional carbon dioxide into the field reservoir.
Although huge quantities of natural gas have been produced from the Prudhoe Bay field along with oil over the years, most of that gas has been re-injected into the field's reservoir to help maximize oil production. The gas is used both to help maintain the fluid pressure in the reservoir and, mixed with natural gas liquids, to flush oil from the rock pores.
To maximize the hydrocarbon recovery from the field, the AOGCC has capped the amount of gas that can be removed from the field, with the agency favoring the use of gas for enhanced oil recovery. To obtain approval for an increased gas offtake, the owners of the Prudhoe Bay field will need to convince the AOGCC commissioners that the offtake will result in greater hydrocarbon recovery while minimizing any hydrocarbon wastage.
Essential step
It will be critical to the owners to obtain AOGCC approval before committing to the huge expense of the front-end engineering and design stage of the North Slope gas line project, sometimes referred to as the AK LNG project.
"Amendment of Rule 9 (the gas offtake limit) is being requested at this time in consideration of current actions by the State of Alaska and the AK LNG parties … to progress the AK LNG project to the front-end engineering and design (FEED) development stage, which effort involves the expenditure of billions of dollars," BP said in its application to AOGCC. "To move to the FEED stage of project activity, a number of project-enabling actions have been identified."
According to BP's application to AOGCC, Rule 9, adopted in 1977, limits the Prudhoe Bay natural gas offtake to a maximum average of 2.7 billion cubic feet per day. But, currently, only about 0.6 bcf per day of that allowed limit is actually used, primarily as a fuel for North Slope operations but also for minor local gas sales, the application says.
And, to date, the recycling of gas through the field reservoir for enhanced oil recovery has contributed to an increase in total oil production from an initial estimate in 1977 of 9.6 billion barrels to a cumulative production to date of more than 12.2 billion barrels, the application says.
Higher offtake limit
The participants in the AK LNG project anticipate the start of major gas sales from the North Slope in 2025; on May 28, the U.S. Department of Energy conditionally granted authorization for the export of LNG from the project to non-free-trade nations, the application to AOGCC says. But while, under the current gas offtake rule, some 2.1 bcf per day would be available for delivery to the gas pipeline system, net of gas used as fuel on the North Slope, the design of the LNG project assumes an average gas supply of 3.5 bcf per day to the project, the application says.
The AK LNG project anticipates about 75 percent of its required gas coming from the Prudhoe Bay field, with the remaining 25 percent coming from other sources, the application says. Under this scenario, the project would require a Prudhoe Bay gas offtake of about 3.3 bcf per day, including fuel gas, an offtake higher that the current limit of 2.7 bcf. The term "other sources" presumably references, in particular, the giant Point Thomson gas-condensate field that Exxon Mobil is developing to the east of Prudhoe Bay.
However, to accommodate the risk of gas from those other sources not being delivered as expected, BP is asking authorization to meet all of the LNG project's gas needs from Prudhoe Bay gas production, should that prove necessary. That would require an average offtake of 4.1 bcf per day (3.5 bcf for the gas line project plus 0.6 bcf for fuel gas).
BP says that it has upgraded its field model for the Prudhoe Bay field since the AOGCC last considered the gas offtake limit for the field in 2007. There have also been changes to the inputs to the model, including updated production data, updated drilling information and updated fuel-gas algorithms, the company says. The Prudhoe Bay working interest owners presented results from the upgraded model to AOGCC staff this past April and May, and included an assessment of these results in a confidential appendix to the injection order modification application, BP says.
Carbon dioxide
BP is also asking for permission to inject into the Prudhoe Bay field reservoir the large volumes of carbon dioxide that the project anticipates separating from North Slope gas, using a plant that will need to be built to treat gas earmarked for export. Untreated Prudhoe Bay gas contains about 12 percent carbon dioxide.
The company's application to AOGCC says that it is applying for authorization to inject additional carbon dioxide into the Prudhoe Bay reservoir at the same time as applying for the increased gas offtake, since both applications are tied into the requirements of the AK LNG project. The application says that the injection of carbon dioxide is a key part of the implementation of major gas sales from Prudhoe Bay, a development that will result in the recovery of the equivalent of about 3.8 billion barrels of oil from the field.
The application also says that the injection of carbon dioxide into the Prudhoe Bay reservoir is already permitted as part of regular gas cycling operations in the field; the new request asks for permission to inject incremental carbon dioxide delivered to the planned gas treatment plant from fields other than the Prudhoe Bay field itself.
BP's analysis and assumptions relating to carbon dioxide injection are contained in a confidential appendix to its application to AOGCC for the injection approval. However, in the public section of the application, the company says that there are no subsurface sources of freshwater inside the Prudhoe Bay unit that might be impacted by the carbon dioxide. Injection would only be allowed into specified rock strata and there would be requirements for periodic mechanical integrity testing and for the monitoring of injection wells, the application says.
AOGCC has scheduled a public hearing to review BP's application on Aug. 27 at the Anchorage Legislative Information Office.
Correction: An earlier version of this story gave the wrong date of the public hearing to review BP's application. It's Aug. 27 not Aug 17.
This story originally appeared in Petroleum News. It has been republished with permission.