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Point Thomson: Exxon Mobil gets go-ahead on Arctic gasfield development

Alex DeMarban
Photo courtesy of ExxonMobil

Efforts to tap into Alaska’s largest undeveloped oil-and-gas field took a big step forward on Friday with the U.S. Army Corps of Engineers issuing a critical permit for the Exxon Mobil Point Thomson project on the Arctic coastal plain.

Decades of attempts to develop the project were revived last year after Exxon Mobil and the state reached an agreement that the state believes will lead to development. The field, located some 60 miles east of Prudhoe Bay, is said to hold hundreds of millions of barrels of gas liquids and oil as well as 8 trillion cubic feet of natural gas. That's about a quarter of the massive natural gas reserves thought to exist on the North Slope. As a result, the project -- said to be critical for development of a trans-Alaska natural gas pipeline -- has been the subject of a dispute between Exxon and the state over a lack of development.   

The permit, issued under the Clean Water Act and the Rivers and Harbors Act, will allow Exxon and the company's PTE Pipeline LLC to place "fill materials in waters and wetlands and structures in navigable waters" to construct the project, according to a press release from the Corps.

The permit allows Exxon to build infrastructure to extract hydrocarbons using directional drilling into the Thomson Sand Reservoir, the release said. Permitted facilities include three drill pads, a building for hydrocarbon processing, about 10 miles of roads, a gravel mine, airstrip, barge docking facility, navigational structures, dredging, an emergency boat ramp, gathering pipelines within the field, and an export pipeline to the Badami facility 23 miles to the west.

Press releases lauding the decision began trickling in early Friday, with Sen. Mark Begich first out the gate. The announcement is good news for the state economy, and will lead to new jobs and was issued following a three-year process, he said.

“I applaud both Exxon and the Army Corps for staying at the table and working out this permit,” Begich said.

The Alaska Congressional delegation has pushed for issuance of the permit at top levels within the Obama administration. 

More from the Corps press release:

The permit contains 37 special conditions to minimize adverse impacts to the environment, including payment of a mitigation fee to the Conservation Fund to compensate for unavoidable losses of aquatic resources.

Col. Christopher Lestochi, Commander of the Alaska District, said he found the applicants’ preferred alternative, with modifications and optimizations developed through the review process, to be least environmentally damaging practicable alternative (LEDPA), as required by law. These measures included relocation of both east and west gravel fill pads away from higher functioning coastal wetlands, minimizing fill placement along the coastal shoreline to provide for polar bear access, and reduction of the gravel mine size.

The Corps evaluated five alternatives that included both inland and coastal infrastructure designs, and completed an Environmental Impact Statement for the project. The Corps conducted an in-depth analysis of alternatives and supplemental technical information in order to come to a decision on the permit application."

TAPS gets a new customer

Point Thomson is the state’s largest undeveloped oil and gas field, containing 25 percent of the North Slope’s known conventional natural gas. Exxon Mobil is seeking to build an initial production system at the Point Thomson Field that will send 10,000 barrels per day of liquids condensate through TAPS. This is the project that the Corps has now approved.

In a legal settlement between Exxon, other Point Thomson leaseholders, and the State of Alaska, the initial production system was required to be online by the winter of 2015-2016, with additional provisions for full-scale development of the Point Thomson field. The startup date for the initial production system is a full year later than previously agreed to by the state and Exxon due to federal delays in issuing the ROD. The settlement also includes deadlines for full-scale development of the Point Thomson field.

This fall, the state and the North Slope Borough have moved forward with more than 100 permits and authorizations for the initial production system. Many of those permits depended on and could not be finalized without issuance of the ROD.

To advance the Point Thomson project, Exxon has hired nearly 50 contractors, including many Alaska-owned firms. In briefings, Exxon has told state officials that this project will create an estimated 600 to 700 jobs from 2013 to 2016, with up to 2,400 jobs during peak construction.

Contact Alex DeMarban at alex(at)alaskadispatch.com