BLM delays regulatory approval for Alaskan North Slope Willow project

Anchorage — The U.S. Bureau of Land Management has pushed back its final approval for ConocoPhillips' proposed Willow project in the National Petroleum Reserve-Alaska, the BLM said in a statement Tuesday.

The agency will prepare a Supplemental Environmental Impact Statement, or SEIS, based on changes in the project configuration by the company, it said.

Willow, expected to produce 130,000 b/d, is now likely to begin production in 2026, a ConocoPhillips spokeswoman said Tuesday. The project cost is estimated at $4 billion to $5 billion based on an estimated 450 million to 800 million barrels of reserves, the company has said.

This comes following a drop in plan to build an offshore artificial gravel island in shallow offshore waters near the coast of the petroleum reserve to unload large modules that would be shipped by barge. The revised plan is to unload the barges at an existing dock at Oliktok Point east of the NPR-A.

While the BLM decision effectively delays the agency's final approval until late 2020, ConocoPhillips had, meanwhile, decided to push back the project schedule to gather additional information about Willow's reservoir, company spokesperson Patty Sullivan said in an email.

"We have moved the anticipated start date back approximately one year from the date in the DEIS [Draft Environmental Impact Statement]," to about 2026, Sullivan said.

"The reason for the change is our decision to gather another round of appraisal data in the 2020 winter season. We believe we need additional information to better understand the geology and reservoir characteristics of the formation before making a final investment decision," she said in the email.

On the change in the artificial island plan, Sullivan said, "This new option eliminates the concerns from North Slope communities about the gravel island's potential impacts to marine mammal subsistence activities. It also reduces the amount of gravel needed for the project. It reduces the size of the [gravel] mine site and amount of mining activity."

Unloading at Oliktok Point further east, however, will involve moving the modules a greater distance overland on winter ice roads and across the Colville River on an ice bridge, which would have to be sturdy enough to accommodate the heavy weights of the modules.

Large oilfield process modules for North Slope projects are commonly built at fabrication sites in more temperate climates, often in Asia, and then shipped by barge through the Bering Strait and the Alaskan Beaufort Sea to a point on the coast where they can be unloaded. They are unloaded and moved overland, often for several miles, to the project location.

Willow is inland in the northeast NPR-A and about 30 miles west of the producing Alpine field, which is on state of Alaska lands near the Colville River delta. The river forms the boundary between state lands and federal lands in the petroleum reserve.

ConocoPhillips said it believes Willow will be capable of peak production of 130,000 b/d once in production after 2026. The company, meanwhile, has two smaller projects also in NPR-A east of the Willow location. GMT-1 is now in production with expected peak production of 25,000 b/d. A second project, GMT-2, is now in construction and will begin production in 2021 with an expected peak of 35,000 b/d to 40,000 b/d.