Anchorage — Prudhoe Bay field owners BP and ExxonMobil have asked an Alaska regulator to approve plans to increase the volume of natural gas allowed to be produced and sold from the North Slope field.
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The Alaska Oil and Gas Conservation Commission has set a date of August 27 for a public hearing, BP spokeswoman Dawn Patience said Monday.
The AOGCC previously set a limit on gas offtake of 2.7 billion cubic feet of gas per day in 1977. BP and ExxonMobil have now asked for permission to increase the rate to 4.1 Bcf/d to supply a planned Alaska gas pipeline and LNG export project, according to the companies' application.
The commission is a state regulatory body that has oversight over oil and gas field operations, and is required by law to seek maximum recovery of hydrocarbon fluids.
A separate application for gas offtake from the Point Thomson gas field, which will also supply the Alaska LNG Project, is expected later.
BP is the Prudhoe Bay field operator and a major stakeholder along with ExxonMobil. ConocoPhillips, also a major stakeholder, was not included in the application submitted to the AOGCC by the two other companies.
ConocoPhillips spokeswoman Natalie Lowman said the company has been working with BP and ExxonMobil on the offtake issue. "We are not aware they intended to make a unilateral filing," she said in a statement. Lowman said ConocoPhillips will have more to say at the AOGCC hearing.
Patience said BP could not comment on the matter and that there would be more discussion at the AOGCC hearing.
One concern over the gas offtake is that the regulator must ensure that gas sales from Prudhoe Bay will not result in significant loss of long-term oil recovery.
About 8 Bcf/d of gas is now produced -- along with oil -- at Prudhoe, but the majority of that injected back underground to maintain pressure in the reservoir to aid oil production.
The concern is that if some of the produced gas, in this case up to half, is shipped to markets via pipeline there will be less gas injected and less support for pressure in the reservoir. That could result in lower oil output.
In the application, BP and ExxonMobil said the loss of oil recovery would be mitigated by steps including injection of carbon dioxide in an enhanced oil recovery project.
Prudhoe Bay gas contains about 12% CO2, which must be extracted from gas before it can be shipped by pipeline to an LNG plant set to be built in southern Alaska.
That process will make large quantities of CO2 available on the North Slope to aid oil recovery.
At the August 27 hearing, the two producers will present evidence showing that the loss of oil recovery can be minimized.
"In accordance with good oil field engineering practices, at various stages of field development the Prudhoe Bay field owners have evaluated the potential effects of Prudhoe Bay major gas sales on oil production and hydrocarbon recovery. Gas production from Prudhoe Bay (to date) has been used for extraction of miscible injectant, manufacture of natural gas liquids, pressure maintenance and enhanced oil recovery," Dave Lachance, BP's vice president for reservoir development, said in the application.
About 75% of the 3.5 Bcf/d of gas needed for the Alaska LNG Project, or about 2.7 Bcf/d, is expected to come from Prudhoe Bay. About 25% of the supplies for Alaska LNG will come from other sources, the application said, mainly the Point Thomson field.
At Prudhoe Bay, an additional 600 MMcf/d would be needed to fuel field operations and for local gas sales, raising the average daily offtake requirement to 3.8 Bcf/d.
However, a contingency must be built in to account for potential interruptions in gas supply from other fields, so BP and ExxonMobil have requested authorization for up to 4.1 Bcf/d to cover those shortfalls if they occur, according to BP's application.
Overall, the Alaska LNG Project will result in the production of an additional 3.8 billion barrels of oil equivalent, of which the CO2 injection is an important part, according to BP's application.
About 13 billion barrels of crude oil are now expected to be produced at Prudhoe Bay, so the additional 3.8 billion BOE is significant. About 12.2 billion barrels have already been produced from Prudhoe, the application said.
Originally, the field was estimated to be set to produce about 9.6 billion barrels, but recovery has improved substantially due to a variety of steps, including use of the existing gas production for pressure maintenance and to make miscible injectant for enhanced oil recovery, BP said in the application.