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CO 102 B
Image Project Order File Cover Page XHVZE This page identifies those items that were not scanned during the initial production scanning phase. They are available in the original file, may be scanned during a special rescan activity or are viewable by direct insppection of the file. Order File Identifier Organizing (done) ^ Two-sided ~~~ ~~ RESCAN DIGITAL DATA ^ Color Items: ^ Diskettes, No. ^ Greyscale Items: ^ Other, No/Type: ^ Poor Quality Originals: ^ Other: OVERSIZED (Scannable) ^ Maps: ^ Other Items Scannable by a Large Scanner OVERSIZED (Non-Scannable) ^ Logs of various kinds: NOTES: ^ Other: BY: Maria Date:J~ `p~. D ls/ Project Proofing BY: Date: ~/`, D /s/ Scanning Preparation BY x 30 ,_ + Date: = TOTAL PAGES (Count does not include cover sheet) '/ /s! Y Production Scanning / / IIIIIIIIIIIIIIIIII Stage 1 Page Count from Scanned File: ~-~ (Count does include cover sheet) Page Count Matches Number in Scanning Preparation: V YES NO BY: Maria Dater `a//D /S/ rn~ ((/ Y" r~ Stage 1 If NO in stage 1, page(s) discrepancies were found: YES NO BY: Maria Date: /s/ Scanning is complete at this point unless rescanning is required. I) I II II II I II II I I III Rescanned IIIIIIIIIIIIN IIIII BY: Maria Date: /s/ Comments about this file: Quality Checked III IIIII III II'I III IIIIIIIIIIIIII ,. Re=~,,,„e¢aea Illllllllllilllllll P 10/6/2005 Orders File Cover Page.doc • Index Conservation Order 102B 1. April 14, 1972 2. May 5, 1972 3. May 11, 1972 4. October 4, 1972 5. October 10, 1972 6. November 1, 1972 7. November 14, 1972 8. November 16, 1972 9. May 4, 1973 10. June 12, 1973 11. July 5, 1973 Notice of Hearing, Affidavit of Publication AK Conservation Society request for delay on termination of Cook Inlet offshore flaring Hearing transcript and testimony Amoco request for Order extending effective date Mobil Oil motion for stay of Order Order Stipulation Order Remanding Case to Agency Memo re: Order remanding flaring matter Amoco Letter re: Verbal request for emergency flaring Amoco Letter re: Repairs for flaring of excess gas Emergency Order request flaring of excess gas Conservation Order 102B STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OF O I L AfJD C~,AS Alaska Oil and Gas Conservation Committee 3001 Porcupine Drive Anchorage, Alaska 99504 Re: TWE APPLICATION OF AMOCO PRODUC-) TIOPJ COMPANY for an order amending ) Rule No. 2 of Conservation Order No. ) 102 by deleting the date ''July I, ) 1972" and substituting the date ) "November i, 1972". ) Conservation Order No. 102-E3 Granite Point Field Middle Kenai Oil Pool June F3, 1972 IT APPEARING THAT: t. The 0i1 and Gas Conservation Committee published a notice of public hearing in the Anchorage Daily PJews on April 14, 1972, pursuant to Title Ii, Alaska Administrative Code, Section 2009. 2. A public hearing was held P~4ay II, 1972 in the City Council Chambers of the Z. J. Loussac Library, 5th Avenue and F Street, Anchorage, Alaska, at which time operators and affected parties were heard. FINDINGS: 1. Immediately following issuance of Conservation Order No. 102, an operator and affected parties commenced studies to determine a beneficial use or uses of the excess casinghead gas being flared. 2. Following determination of beneficial uses of the excess casinghead gas being flared, engineering and design studies were undertaken and equip- ment and construction contracts were entered into. Gas sale contracts were also executed. 3. All of the foregoing was accomplished with due diligence, but was delayed owing to necessary engineering and design time, seasonal weather conditions, and construction and delivery time of specially-designed equipment. CONCLU S I OPJS I. An operator of the referenced pool and affected parties have made a bona fide effort to comply with Conservation Order No. 102, but compliance will be delayed by conditions beyond their control. 2. Compliance with Conservation Order No. 102 can be expected by October 15, 1972. 3. The dates in Rule Nos. I and 2 of Conservation Order No. 102 should be changed to the earliest practicable date which is reasonable, but not beyond such date. s ~ Conservation Order No. l02-B Page 2 June 8, 1972 NOW, THEREFORE, IT IS ORDERED THAT: I. Ruie No. I of Conservation Order No. 102 is amended to read as follows: "Casinghead gas in excess of the maximum amount that can be beneficially utilized may be flared until 7:00 A. ~~1., ADST, October 15, 1972." 2. Rule No. 2 of Conservation Order No. 102 is amended to read as follows: "Effective at 7:00 A. M., ADST, October 15, 1972, the flaring or venting of casinghead gas from the Granite Point Field is prohibited, except for the amount necessary for adequate safety flares and except in emergencies." 3. The Oil and Gas Conservation Committee, by administrative order or orders, may extend the date provided for in Rule Nos. I and 2 of this order. No such order or orders may extend the date beyond 7:00 A. M., ADST, November I, 1972, except pursuant to Title II, Alaska Administrative Code, Section 7.012. i)ONE at Anchorage, Alaska, and dated June 8, 1972. '4'~~A oIL I~ d t ~ :~~ I - ,A ~ - `~ . ~r~flN ~ Thomas R. Marshall, Jr., Executive Secretary Alaska Oil and Gas Conservation Committee Concurrence: ~~ +~ ^,,40 ~~ ~ ~'~ Homer L. Burrell, C airman Alaska Oil and Gas Conservation Committee • 0. K. Gilbreth, Jr., Member Alaska Oil and Gas Conservation Committee Z fi ~ wt L ~, o~ Z.. C. 0 . / 0 ~. • j3 ~l1,AS~ f?# L ~~ ~~ ~i~~AT#43d~ Ct~#TTEE !°3Q~'. 7.p F 7~.d fi i+3 ~~ ~ ~ ~ J ~ 7'4 Fti~ f } 1F ~ ~ ~ F` 3`Y 6J iF {'6 L. ~i ~+~ f?J'!L""~a ~~ s €rge~t~cp ~ f a~r# ~q rsf s # # ~x~e~s c~as ~`r~ ra~~ #te !~# Est P # a~'f€rr~'t +~, f~r~el~~tt~~ ~aa~tY ~pera~t-ar. P#r. ~. fit. Jts #3#strtet Pro~4~a+~t~an 5a~a+~r#~fien~#ent Pt ad ~~'~ i ott PY ~'. ~?, ~x 77`33 ~h~rag~, t~#~~€~ ~#f3 €~msr ~~r, da~c~ss The re~fere ree#ue~# b~ Pr~€luc~t #c C~rQ~~q rtes race # ved tare # # y ~ ~4ap ~, #973 fa# #c~red ~Y ~ wri~'#-~~ requ~~~f dated ~ 4, #973. The bay # s far -~ rec}e~~t #!~ tha# a~ ~ E` # zrs~ # ~t # ~g ~~ # an ~: t # e betw+c~ ~r~n#te P~#~fi }'#a#tt~r+~ ~r~~~ €~#te #'c~#'r~t P~'~a~f~r ~:~r s found ~rr~e~i -PQ tt-e er~-#`es~~ ~-~t~~ ~ t # s c~n~ # dared a~ ha~~rd #m ! # f~ a~ t4 sh # P ~ tk~rc~t.+g~ the # # ua~t # # ~ # r~ are ode. TES ~~ #ao~ # ~ the # ~ l et bo~f'o~ a~x ate # ~ 34 feet f rc t#~e P t ~rtfc~r+~ Anna F~eri~#ss#on Fs (~retry~ gray#ed purst~~t i-Q Ru#e 2, ~~s~r~~t#an ~rcisr # a2-B, t4 ccutdcret t~ re~ue~# ed f # ar, #:n~ ~t€~# ~ # rape # is Q #et~d . F#ease k t~s c#c~se#~r a~tv#s~d cif Pr~~~ Qf tip r#r Herat#c>r~. fiery #r~ # `/ }EC~+~rs Thtx~ R . r~sha E # , ~ r. Fac~eul~ # ~e Secretary '~: f~. ~nSF:A 01L AND GAS CONSERVATION f~i. TEE October I3, 197?_ f9r. John C. 5ch i I lereff Amoco Production Company P . 0 . E3ox 779 Anchorage, Alaska 99510 Dear f^r. Schi I lereff: Re: Administrative Decision flo. 107_-B.I Granite Point Field f~liddle Kenai Oi I Pool Pursuant to Order PJo. 3 of Conservation Order PJo. 102_-A, the Oi I and Gas Conservation Committee hereby further amends Rule No. ( and Rule fJo. ?_ of Conservation Order fdo. 102 to read as fot IoHrs Rule PJo. I "Casinghead gas in excess of the maximum amount that can be beneficially utilized may be flared no later than 7:00 A. P~., AST, f~Jovember I, 197?_." Rule fJo. 2 '"Effective no later than 7:00 A. f1., AST, November I, 1977_, the flaring or venting of casing head gas from the Granite Point Field is prohibited, except for the amount necessary for adequate safety flares and except in emergencies." lJnexpected delay ,in the receipt and subsequent installation of equipment necessary to handle the excess casinghead gas from the Granite Point Platforms Anna and E3ruce has been recognized by the Oil and Gas Conservation Committee. d ti n ~ ~ ~ ~ ~~~ cn~ -, h~ ~L.. S,M ,.~ y 4~ .?,ION Co 7 ~~// / ~~,~ Thomas R. P~arsha i I , J r .Executive Secretary Alaska Oil and Gas Conservation. Committee Concurrence: f-lomer L. Burre I I , Chairman Alaska Oil and Gas Conservation Committee O. K. G i reth , J r. , ember Alaska Oil and Gas Conservation Committee x$11 ~ ~ STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OF OIL AND GAS Alaska Oil and Gas Conservation Committee Re: Emergency Order July 5, 1973 Conservation Order File 102 Granite Point Oil Field Because of fire and explosion at the Collier Carbon and Chemical Corporation plant, Amoco Production Company and Shell Oit Company applied for the referenced order by letter dated July 5, 1973 requesting the emer- gency flaring of excess casinghead gas equal in volume to that which would normally be delivered to the Collier plant. The gas will be flared at the joint Amoco - Shell facilities on the east shore of Cook Inlet. Pursuant to Alaska Administrative Code Section 2012 permission is hereby granted to flare excess casinghead gas in an amount equal to the normal sales volume to the Collier Chemical Company until 7 AM A.D.S.T. Juiy 21, 1973 or until normal gas sales are resumed to Collier Chemical Company if this occurs at an earlier date. Thomas R. Marshall, Jr. Executive Secretary Alaska Oil and Gas Conservation Committee 3001 Procupine Drive Anchorage, Alaska 9950) X10 ~~ ~O~ _~- June 12, 1973 File: WMJ-322-986.511 Mr. Homer L. Burrell, Director Divisionof Oil and Gas Department of Natural Resources State of Alaska 3001 Porcupine Drive Anchorage, Alaska 99504 Dear S it Re: Emergency Flaring of Excess Gas Granite Point Platform Bruce SEC FILE.: C.O.JUZ-13 Please refer to prior correspondence on the above subject ending with your "Administrative Approval No. 102-B.2".and our telephone conversa- tion on May 24 regarding a delay in initiating repair operations. As discussed, we were unable to initiate repairs as scheduled due to a delay in obtaining the necessary men and equipment. Pipeline repair operations were initiated on May 29, 1973 and completed on June 2, 1973. These repairs consisted of removing the defective in- sulating union and replacing it with a flanged pipe spool. Normal gas shipment was resumed at 11:30 p.m., June 2, 1973. Yours very, 'tru W. M. Jon\ / ~` District ro"~tion Superintendent © ~~~~ "~. JiJP~I ~ ,~ '- DIRT _` IC.GE L C. ENG _l -ENG, ti A P d C 2 ENG . ompany ro on moco uc ~ s Eve 4 ENG P . 0 . BOX 7 J9 ~ 5 ENG Anchorage , Alaska 99510 ~ - ~ ~EO~ 2 GEOL 3 GEOL I REV ..~~~:~ ~ ~, r M I- • ~~ ~O~ ®~~ May 4, 1973 File: WMJ-249-986.511 Amoco Production Company P. 0. Box 779 Anchorage, Alaska 99510 a~ ~~~ -~~I~, ,~p~~~ta~tcvt ~d ~ ', e I ~ ~ ~ ~ ~Ld~tµ~1"~'xtiu~. Mr. Homer L. Burrell, Director Division of Oil and Gas Department of Natural Resources State of Alaska 3001 Porcupine Drive Anchorage, Alaska 99504. Dear Sir: Re: Emergency Flaring of Excess Gas Granite Point Platform Bruce ' DIR r ~x C. GEOL C. ENG i ENG 2 ENG 8 ENG 4 ENG --I 5 ENG i 1 GEOL 2 GEOL ~ _A ` 3 GEOL ~ ,-~ - REV ~ DRAFT SEC CONFER: FILE: C.O, r0'~„~ O{-~rct ~.~ e., This letter is intended to supplement our verb al request of May 3,.1973 for emergency flaring of all excess gas from Granite Point Platform Bruce through May 29, 1973. Underwater photographs and diver inspection have revealed-that an 8" insulating union on the gas line between Granite Point Platform Bruce and Granite Point Platform Anna has corroded to a point where we consider it unsafe to ship gas through the line until repairs are made.. The union. is located on the Inlet bottom approximately thirty feet from Platform Anna, and it poses a potential fire hazard should it fail with the line under pressure. The gas line was shut in at 9:00 a.m., May 3, 1973 upon discovery of the union's deteriorated condition and the line was immediately bled down and displaced with water. Efforts are now underway to locate and organize the necessary men, equip- ment, and materials to repair the line with the utmost expedience. We will make every attempt possible to restore gas shipment from Platform Bruce prior to the_~:y~=30' expiration date of our emergency request. Should gas. shipment from the platform be restored prior to that date, you will be notified immediately. Meanwhile, please contact us if additional informa- tion concerning our request for emergency flaring is desired. Yours very t d ~ ~ ~- •_ i W. M. Jones ~ ~ ~ q, ~ -' ~~ District Pr cYuction Superintendent ~ ~ ~~-~{ ' I''. ,::~~,' r?. V ~, .. ~' ~,. '.. ~$ F~, RM 02-001 B /' E ~ 'Y MEMORANDUfVI To: r FROM ~ die c.c~`_ C. ENG 7 EI~G 2 ENG ' 3 ENG _~; >'~ GEL 2 G`OL 3 GEOL i_ REV 1 nRAfT - ~ sic coN~E,z:"- / ' ~ w State of Alaska DEPARTMENT OF LAW Homer L. .Burrell, Director Division of -0il and Gas ~aTe November 16, 1972 John A. Ree-der,- Jr suB~ECr: Mobil v. State. - flaring case. Assistant Attorney G 1 No.-71-332 AG0 - Anchorage ~:' Enclosed is an Order remandingthe...flaring matter to the Oil and Gas Conservation Committee again for further findings in the light of the expert tesimony adduced at-the hearing with respect to the stay of the Committee's orders. As the Judge has explained in his Order, he feels that. the expert testimony placed of record was not of record~~~~ at the time of the hearing and,. in addition,.-there may be ~~ ~I other evidence which was not available to the Committee at ~~~~ e ime of its in Ma 1972 Therefore, he is i ~ zng the Committee to review this matter .once again by ~~~' ,~~' ~ means of reviewing the transcript, which we wi7~,7. prepare and ~ ~.~ ~~` forward to you. As I understand the Order, this does not e,~ require a hearing unless the Committee feels, in reviewing this evidence, that it should obtain further evidence from Mobil. I will try to get the transcript to you as soon as possible as I know you are. anxious to have this case ,proceed further in litigation. you. have. reviewed the transcript, we should discuss yo Or in some detail as I am sure it will be the one upon w ich final appeal will be taken. ~~I Qom,, JAR : m !Y`;p~c,/ ~ " j `M'me Encl. ~- ~- ~~ ~~ {~~ 0~~ ~ ~ ~i~V~~~~~~~ ~~ 11/16/72 The Court Transcript Section has two girls working, on this transcript now but since it i.s quite lengthy she said it may take two weeks. I asked her to put a "rush" on it and she said she would. Millie ~ 7 r ~ _, r _ _ _ _. _ . u ..__._ . _.. ~ _ _ _ IN THE SUPERIOR COURT FOR THE STATE OF Ai~ASKA THIRD JUDICIAL DISTRICT P=~OBfiL OiL CORPOR.~`Z'ION, ) Plaintiff, ) v~. ~ ~_ } .~~ ~ ~ STATE OF ALASKA,. et al, ) ~.-,'~, r,. Defendants , } ~.~~`,,, ~ " } . ,i, ~ ~ ~`~ lj LL c ? No. 71-332 t~ "1?,~"' ORDER REMANDING CASE TO AGENCY A continuation of the appeal conference was held Plovember 3, 1972. Present were H. Russell Holland, Richard T~!I. Thornton representing Mobil Oil Corporation, John A. Reeder, Assistant Attorney General representing the State of Alaska, Ra?_ph Crews representing Amoco Production CampanP and John. Scott represent- ing Atlantic Richfield. As a result of testimony adduced at the hearings,baf~re this court on motion fora stay pending appeal, on September 25, and October 3,.1972, certain information has been mods of record which should be considered by the Alaska Oil and C~as Conservation Committee in conjunction tr~ith its orders i~To. 102, 102 A, 102 ~3 and 102 C. tiThile this court has entered .its ardor, staying fhe en- farcement of orders 102 through 102 C, an October 10, 1972, fal~.awir~g the. aforesaid. hearings, the evidence adduced at the hearings consisted of expert testimony and suppl_e~,^enta? date ~rhi~h the agency, in it expertise, hay r,ot examined and Y;uled upon. It is the vi eUi cf this court that, notwithstanding t'r?e appeal,.. this court should not, and under the constitutional dc3c~trines of separation o~" po;vers may not itself enter final ~~~~~ N A~' ~~ c3 =~~~ ClV~~1~- cti -- ~ ~~~ j~~~3 ~A .. _ _.. ~_ _r_- conservation orders, upon new testimony,. concerning conser- vation of oil. and gas resources in conflict Stith Alaska Sta.- tote 31.05.170. This courts review is limited to instances where the Committee has abused its discretion, or has. acted without. due process. or contrary to law. Cf. Fsch~ack and .Moore of Alaska, Inc., vs. L,yrn 407 P2nd 174, 178. (Alaska 19c~5). It is hereby ordered that the proceedings before this court on September 25 and. October 3, 1972 be transcribed, with a copy of-said transcript to be furnished.. to the Alaska 0i1- .and Gas Conservation Committee, together with the exhibits, that the case is remanded to said Committee for its consider~a- tion in the light of the record as so augmented, anal that. this appeal be continued without. date pending the report of said Committee. Dated at Anchorage, Alaska,. this~~ day of November, 1972. ~J . r' ,~ ~. ~ E(B~E/N~ H . LE~r1I S SUPERIOR COURT JUDGE -2- ~~~ ~ f ~~ C`tV-51CJ « ~.~ ~ ~41~ AMA ~A~ ANCHQR~~~ ~6 .:.---~~ , i C. d. is ~3 . ~ ~. I1d THiJ SUPERI013 COUI3'P FOR THE STATF. 0~' ALASKA 'f~iSRD JUD=CIAL: DIS~~iIC"~, DiOuIL OIL CORPORATIOPI, j Appellant, ) _.. ) .. .. ~~ . v. ~ ) STATE OF ALASKA, DR°T. OF NATURAL ) RESOURCES, throu~,h its 011 and ) Gas Conservation Committee, et al ) Appe~.lee. ) . ~- ;do. 71-3432 ' S T I P U L A T ION ~ • ~ COME X101+1 the undersigned, counsel for Appellant and. Appellees in the above referenced natter, and stipulate as follotrs: 1. Appellaizt's motion for stay :.hall be hear on September 25, 1972 at 1:3C P.P~I. 2. The Alaska Oil and Gas Conservation Committee, pursuant • ) to ad:~ir~l.strative authority- : ~sL~ ved in ~.ts Conservation Order No. • 1C2-}3 concerning the Granite Point i~ ield, :~1id31e Kenai Oil Pool, will extend the ,date provided far in Rule tJos. land 2 of said Order 'to 7 ; 00 A. ?1. , ADST, PJoVertber l ~ 197 2' • ~, DATr:D THIS ~ ay; of , 1972. J~iiiJ T?,. HAVELOCK 13~ z o m~ S < ~ N ~•~- < d ~ ` Y Z ~ a n fl a a ~r ~ O r ~ J O ~ o e HbLL :JD & TIiORNTON • B~~•i. Russel~ilo? i and ORDisR } ~.; ~ IT IS SO ORDi:~2ED; and, 1 r. eonsid r2tion of the :`act t:~µt 1 thy: hearing-herein provided for will likely take the entirety . Hof the afternoon of September 2~, 1972, the C:~lend3r Clerk in directed to Set no other matters t~efore the undersiUned { ;. • 1 y ._ }... r 1 . ~ ~ }~ _` . ..~ i ;. ~5 IN THE SUI'ER~IOR COURT FOR THE STATE OIL ALASKA THIRD JUDICSAL DISTRICT Appellant, ) ~tl<.. /n 2, l02~~ /oz~t/ozc,.~ f1 STATE OF ALASKA, DEPARTMLPIT ) _ ~~~`'`~:,~ ,~ ~ . OF NATURAL RESOURCES through ) ~ ~ t~ •~ ~ °~Is its Oil and Gas Conservation ) ~ ~~ r ~" Committee, ) ~ ~v~~fL~ - ~~j~ Appellee.. ) cGw,~>>~ 1r, ~y '~::. ``7 ~•~ No. 71-3432. • O R D E R . ~ I • 'Appellant's Motion fora Stay of Orders 102 through.. 102 (C) of the Alaska~011 and. Gas Conservation-Committee came on regu~larly~for Hearing on September 25, 1972. The proceedings .....were` cc~n~in`U'~d~'~'nt.i1;"Oct+~ber 3.,......1972, and were pleaded on ~ _ ~ October 4, 1972, at which:-time the Court rendered its oral~~°°. ~ opinion. Based upon said oral opinion, and the Court being ~ fully advised in .the premises IT IS HEREBY ORDERED that enforcement of Urders 102 through 102(C) are stayed until further order of the Court. DATr.D this !G`'~-,day of C~~-~.~',_.~.,-•~ , 197?• /s~ ,. O tl a ~ w Z ~ Y ~ N ~` ~ ~ J 2 O Q W u 2 0 J ~ V k O S ~. R /b ~ ~- • IN THE SUPERIOR COURT FOR THE STATE OF ALASKA - THIRD JUDICIAL bISTRICT APPellarit, ) ~;I~, /02.-, lo~.•A /oz~tloZ.c. ) ~~y v. ) , ~~• ) ~ ~ M TATE OF ALASKA DEPART!~t2T ~'.~~ `~< ~ ~ f ~{ OF NATURAL RESOURCES through ) ~ ~ C%~ ~~ cf~~~ its Oil and Gas Conservation ) ~~. S Committee, ) ~~~f%~ ~1 ~`~~,t~ A e1lee ~~, ~ ,}_ •{~:,; No. 71-3432 ' ORDER • - ~ "Appellant's Motion fora Stay of Orders 102 through 102(0) of the Alaska~011 and Gas Conservation~Committee came on regularly for hearing on September 25, 1972.- The proceedings were contynued until October 3',.1972, and were pleaded om ~ • October ,4, 1972, at which time the Court rendered its oral'°. opinion:•• Based upon said oral opinion, and the Court being - •I ful g: ~t`dviset~~rr--th~...premises _ _ . IT IS HEREBY ORDERED .that enforcement. of Orders 102 through 102(C) are ataye.d until further order of the Court. DATF,D this !~C '~-day of t~~-~.~'~; ~., ., , 1972 • ' ~S ben i. ew s Judge of the-Superior Court= v " ~I n N ~i r x O i _ !I W ii J r ~1 li I _, ~ • i .~ . - j - _ ~ ` - .. .. ~ i ~ 4 ~1 ~T~ AMOCO Amoco Production _f- P. 0. Box 779 Anchorage, Alaska 995 October 4, 1972. ~ /e~~i ~ai.~lbYf ,p~, ~~. `~~~~'' QL' ~ f 1~ ~~,@, ~ !C f S ~a ~i ti 4 File: WMJ-565-986.511 ~k ,~ ~ ~ ~,~,. Mr. Homer L. Burrell, Director Division of Oil and Gas r>' Department of Natural Resources State of Alaska 3001 Porcupine Drive Anchorage, Alaska 99504. n~ Dear Sir: pIR 2 E;VG _~ ~ s*~v I d_ Fi~•;G _5 Er.iG _1 GECL 3 GECL REV ~__ D RgfT 1 __sEC_ I -_- i o'er Re: Request for Administrative Order Extending the Effective Date of Rules Nos. 1 and 2 of Conservation Order No. 102-B to November 1, 1972 We have experienced unexpected delays in receipt and subsequent installa- tion of as sales metering equipment necessary to handle the excess casing- head gas from our Granite Point Platforms Anna and Bruce. We now anticipate installation of the: needed metering equipment cannot be accomplished by October 15, 1972, but should be completed by November 1, 1972. Further- more, it is doubtful that repairs now in progress on our Granite Point gas transmission pipeline can be completed prior to the October 15, 1972 date. In view of the above delays, Amoco respectfully requests that an adminis- trative order or orders be issued to permit flaring of Granite Point Field casinghead gas in excess of the maximum amount that can be beneficially utilized, until November 1, 1972.. Provision for such an extension has been included in Rule No. 3 of Conservation Order No. 102-B. Yo rs very truly, ~xF W. M. Jones District oduction Superintendent cc: H. T. Hunter ~~ ,, _: > r ~""r-_ _ ~,. * ~.~- ~: ~~ ~ i ,., r ~~ w ~ ii ~~~ ~~ ~~7~ ~_ ~'ilY J4 '~. i .. ~ f €.n -+ } ~3 r 1, 2 3 4 5' 6 7 8 9 10 11 12 13 14 15 I6 17 18~ 19 za 21 1 22 '. 23 24 25 1 i i j I ~i TRANSCRIPT OF PROCEEDINGS ..HEARING ON CONSERVATION ORDERS NO. 102B, 103A, 104A & 105A ~I BEFORE THE STATE OF ALASKA OIL AND GAS CONSERVATION COMMITTED MAY 11, 1972 ANCHORAGE, ALASKA I MEMBERS OF THE COMMITTEE HOMER BURRELL, Chairman. TH01~1AS R. MARSHALL, JR., Executive Secretary ~ O. K. GILBRETH, Member R & R COURT REPORTERS - B23 WEBT EIGHTHAVENUE-3U1T8 5 277.4713 ANCHORAGE, ALASKA .99501 . ~ 1 . 2 3 4 5 6 7 8 9 10 11 12 13 I4 15 18 17' 1$ 19 20 21 22 • 23 24 25 1 Page 2 T TABLE OF CONTENTS WITNESS PAGE Nt7MBER C. L. Roberts, Marathon Oil Company 6 Jamss Church, Union Oil Company 19 Richard Keller, Union -Oil Company ~~ ~~ ' , f ~~ ~ ~ -~- 31 C. J. Diver, Union Oil Company 33 Richard Kellar, Uni®n Oil Company n?~ _ ~~ ~~~ ~ 37 B. C. Andsrson, Atlantic Richfield Company.. 39 Bart Giles, AMOCO Productian Company 46 A. 0. P. Casparian, Shell Oil Comp~.ny 53 ~ Bart Giles, AMOCO Production Company 59 ADDENDA: Testimony of C. L'. Roberts Testimony of Richard Ksller Atlantic Richfield Exhibits R & R COURT REPORTERS 825 WEST EIGHTH AVENUE-SUITE 5 277-4713 ANCHORAGE,ALASKA.G9S01 Page ~ • 1 P R O C E E D I N G S 2 MR. BURRELL: Good morning, ladies and • 3 gentlemen. This is the hearing of the Alaska Oil and Gas Con- 4 servation Committee.` I'm Homer Burrell., Chairman;` to my right 5 is Mr. O.K. Gilbreth, Jr., m~mbsr of the Committee; to my le£t g is Mr. Thomas R. Marshall, Jr., a member of the Committee. and 7 Exec~itiv~ Secretary. And let me read this notice of this hearin 8 It's entitled Ccnservation ,Ea.le~:~~~ No. 102,103, 104 and 105, g Regarding the Application of Unien Oil Company of California, 10 Atlantic Richfield Company, Shell 0i1 Company, and AtiOCO Pro- it duction Company for orders amending Rule #2 of Conservation Orde . 12 Nos. 102, 103, 104, and 105, by deleting the date. July 1, 1972 ~~ 13 and substituting in its .place the date November 1 ,1972. ~14 ~ Notice is hereby given that the referenced companies~hav r 15 requested the 0i1 and Gas Conservation Committee to issue orders 16 which extQnd the period of time from July 1, 1972 to November 17 1 ,.1972, during which casinghead gas in aaai~ion to the amount 18 necessary for safety can be flared from the oil pools identified 19 in the referenced Conservation Orders covering the following 20 .fields: Granite Point, TraC.ing Bay, McArthur River, and tiiiddle- 21 around Shoal.- Hearing will be held at 900 a.m. May 11, ~'~2 in 22 the City .Council Chambers at th3 Z.J. Loussac Library, Fifth 23 Avenue and F Street, Anchorage, Alaska, at which time operators 24 of the identified oil pools and affectsd and inter®stsd parties 25 ~ will be hard. Signed by rir. Marshall, the Executives Secretary, '_~ R & R COURT REPORTERS . 826 WEST EIGHTH.AVENUE-SUITE 5 277-4713 ANCHORAGE, ALASKA. 99501 $'~ 1 • 1 2 3 4 5 6 7 8 9 10 11 12 I ` • 13 14 15 16 17 18 19 20 21 22 • 23 24 25 `,• i_ Daily as publish`d in the/News, Anchorages Dai y News on April 14th. should We are using on+~ mike today, this one right here, 2.t/pick up everybody. If they're up in ~ha front, that is. If they speak from the audience, we won't h®ar them. ti9e will ask people who testify to identify themselves so that we can. get .this thing typed upend understznd something that went on anyhow. We're ready to receivz testimony from the applicants. W~ will ask any expert witnesses who have not previously qualified before the CommitteQ as experts to so qualify today, and that al expflrt witnesses be sworn prior to testifying. And I guess we'r ready to start. MR. ANDERSON: Mr. Chairman, m~..mb~ers of the Conservation Committees, I am Robert T. Anderson, District. Land Manager, Union Oil Company of California. In order to bring you up to date on the events which .have transpired since we testi- fied before you last year, we request the order of this hearing. bye as follows: the testimony regarding the Union-Marathon gas pipeline system, to be followed by testimony rQlative to the ;_~. various fields affected presented in a clockwise manner, star~in with th€~ McArthur River Field and ending with Middleground Shoal In relation to the Conservation File .Numbers, thQ order of presentation would be Conservation File No.-104, No. 103, No. 10 , and. ending with Conservation File No. 105. MR. BURRELL: There's no objection. MR. ANDERSON: It is further requested-that R & R COURT REPORTERS - 625 WEST EIGHTH AVENUE-SUITES 277-4713 ANCHORAGE, ALASKA 99501.. Page 5 • 1 all previous testimony, both written and oral, r¢Iating to 2 these four Conservation Fibs subsequent Conservation Order be 8 made apart of the record .of this hearing here today. 4 MR. BURRELL• Without objection, so ordered. 5 MR. ANDERSON: Mr. Chairman, I think it 6 would probably be appropriate at this tima to identify and ? swear in all witnesses who will ba presenting testimony. T 8 wi1L introduce them and ask them to come forward and they can 9 b? sworn as a group. Mr. C. L. Roberts of Marathon Oil Company; 14 rir. James E. Church, Union 0i1 Company of California; Mr. Richar it C. Kellar, Union Oil Company of California; Mr. B. C. Anderson, - 12 Atlantic Richfield Company; Mr. C. J. Diver, Marathon,0i1 13 Company; Mr. Bart Giles, AMOCO Production Company; Mr. Peter 14 Casparian, Shill Oil Company. Have I omitted. anyone that's 15 going to testify? This is it. - 16 MR. BURRELL: Well, there may be others. 1? who will testify of which you are unaware, --- . 18 MR. ANDERSON: That's corract. 19 MR. BURRELL: --- myself also. Have alI 24 these people qualified as expert witnesses with the Committee 21 before? ~ MR. ANDERSON: No. • 23 MR. BURRELL: I don't think so. 24 MR. ANDERSON: Mr. Roberts will qualify 25 himself before he gives testimony; Mr. Keller will qualify R & R COURT REPORTERS 823W£5T EIGHTH AVENUE-SUITES .277.4713 ANCHORAGE, ALASKA 99501 '~' 1 1 21 3 4 5 6 7 8 9 lU 11 12 13' 14 15 16 1? 18 19 20 21 22 23 24 25 '~' 1 Page.. 6 himself before he gives testimony; and I guess those are the only two. The rest have been qualified, and I havfl the informa- tion for their qualifications which I will give prior to their testimony. MR. BURRELL: Fins. Mr Marshall., would you swear the witnesses, please. MR. MARSHALL: Would you please raise y®ur , right hands. In the matter now appearing, do you swear to tQ11 ~, i the truth, the whcle truth, and nothing but the truth, so help you God. . (Group responds 'I do.'.) II ~ MR. MARSHALL: Thank you. Yau may be seated. b'IR. ANDERSON: Mr. Chairman, the initial with®ss, Mr. C. L. Roberts, will discuss the Union-Marathon gas pipeline system. Mr. Roberts has nob previously qualified or testified before the Committee, and therefore I would like him to present his qualifications to you at-this time... MR. ROBERTS: Mr. Chairman, members of the Committ®e. My: name is Claude L. Roberts. I received my B:S. degree in Petroleum and Natural Gas Engin~;ering in 1950 at Texas A & I, Kingsville, Texas. I joined Marathon Oil Company. in 1951 as a Gas Plant Engineer at Bay City, Texas. I have servQd in various staff and supervisory positions for Marathon. I began work on ths~ Alaskan problems in 1967 as a Staff Engineer in~our Finley home office.. In 1969 I was promoted--to Division R & R COURT REPORTERS 8Z5 WEST Ei6 HTH AVENUE-SUITE 5 277-4713 ANCHORAGE,ALASKA 99504 i • 1 2 3 4 5 6 7 $I gl~l 10 I~ 11 12 13 14 15 I6 17' 18 19 20 21 22 23 24 25 '~' 1 • Page 7 PetrolQum Engineer for the Los Angeles Division: I became a resident of Alaska in 1.971 when the Los Angles Division trans- ferred to Anchorage. Engina¢ring activities associated with Alaska operations hav® been my responsibility since 1969. I am a. Registered Professional Engineer in the State of Louisiana and have been since 1957. I'm also a membzr of S.P.E.A.L.,M.E. MR. BURRELL: Thank you, Mr. Roberts. Withou objection, we'll accept your qualifications as an expert witness Thank you. MR. ROBERTS:f As mentioned, my name is Claude Roberts, and I am the ,Anchorage Division Petroleum engineer for .Marathon-Oil Company. {The text of the testimony of Mr. Roberts is attached as an exhibit to this tr,anscript.) MR. BURRELL: Thank you, Mr. Roberts. I think we will go.ahsad and ask questions now rather than wait. WQ'll try and stay in the area in which you've testified. If you find we°re getting outside of it into an area somebody else i.s going to testify on, perhaps you could advise us: MR. ROBERTS: All right. MR. BURRELL: Would that be all right? MR. ROBERTS: Yes, .sir. MR. BURRELL: .Good. Tom, you had a question. MR. MARSHALL: Mr. Roberts, I noticed your Exhibit #1 contains every oil and gas field in Cook Inlet;- conspicuous by its absQnce i.s the Granite point Field. Is that a drafting error, or was that intentionally omitted? R & R COURT REPORTERS 82~ WEST EIGHTH AVENUE-SUITE 5 277-4713 ANCHORAGE, ALASKA 99501 r~ • i. i. . ~ Page 8 MR. ROBERT3: No, sir. This --- the purpose of this exhibit is not to illustrate the source of oil productio When this .exhibit was prepared, we wanted to amplify the pipeln system only. The.--- this system also only carries gas from the west .side, and we do not know at this point. in time: whether that will receive-any Granite Point gas, and definitely the Middle- ground Shoal gas will go into other facilities. The purpose of this system was to illustrate the Marathon-Union gas gathering s stem. Y 1 2 3 4 5' 6 7 8 9 10 11 12 13 14 15 16 17 i$ 19 20 21 22 23 24 25 1 MR. MARSHALL: I see, fine. On your Exhibit #2, which you Head not change, I noticed that you referred to the e~:oEfshore gravel and sand bars as dunes. Is this soma new terminology, or is this something that just crept into the lingo ' by people working on the project? MR. ROBERTS: The analogy that we've tried to portray is that these change very frequently betwe~:n ebb and flood tides, very similar to the way dunes shift and change on a desert, and it's for. this mason that wa selected that termi- nology. MR. MARSHALL: I don't believe you stated. what the final pressure test was on your sixteen inch pipeline or what it will be? MR. ROBERTS: No, sir, I did not comment on that, but it was pressure tested at 2,000 pounds. MR. MARSHALL: I think that finishes my R.& R COURT REPC)RTERS 825 WEST EIGHTH AVENUE-SUITE S 277.4713 ANCHORAGE,ALASKA.9980f '~ questions. Page 9 I • 2 3 4 5 6 7 8 9 10 ~, 11 • 12 ~ 13 14 15 16 17 18 ', 19 20 21 22 • 23 24 • 25 °&'~ 1 MR. BURRELL: Mr. Gilbreth? ' MR. GILBRETH: Mr. Roberts, during the lsaterl I part of your testimony you were giving the statistics on the pressure facility at West Foreland, particularly with regard toy boosting the gas up. Did I understand you to say that you`d be compressing 48 million a day from 150 psi to 425 or 525? MR. ROBERTS: 425. MR. GILBRETH: 425? MR. ROBERTS: Yes. MR. GILBRETII: And then 45 million a day from the plant from 150 to 1200? MR. ROBERTS: Yes. MR. GILBRETH: Would 1200 be th® Inlet pres- sure, your general level of Inlet pressure: through the pipeline at West Foreland? MR. ROBERTS: For the purpose of hauling the casinghead gas to the east side, that'is correct. MR. GILBRETH: What kind ~f a pressuredrop then do you anticipate in the line by the time you get to the east side? MR. ROBERTS: We plan to deliver gas at 1050 into the Nikiski to Swanson River line, therefore about 150 pounds. MR. GILBRETH: I believe you stated that your R & R COURT REPORTERS 825WE5T EIGHTH AVENUE-SUITE 3 277-4713 ANCWORAGE,ALASKA 99SO1 Page 1Q +~ 1 final com ression unit would be in place by around July 21st, p 2 and you anticipates-final start-up November 1st.. Is it the --- ll this time frame that ultimately will determine the delay for a 3 4 of th•e system then? 5 MR. ROBERTS: Yes. 6 MR. GILBRETH: From your other-chart it would q appear that the other phases will be r~:ady before this .time, g is that right? 9 MR. ROBERTS: That in correct. 10 MR. GILBRETH: Could you till us just a little 11 more in detail what is involved in your checkout from the time 12 your equipment is installed until you're ready to go on str~~m;. `~• 13 in other words, account for this period from August to Srpternber 14 and October for de-bugging? 15 i~iR. ROBERTS: I'll be glad to. The --- in ord r 16 to save as much time as possible, the compressor f~.cilities ar® 17 being fabricated: in Houston in a uni-plant module concept whereby ( 28 , the complete station is fabricated on skids. These large sightee 19 skids will be transported as commented on, and once they're set 20 in place, they have to be reconnected. This requires --- once 21 the engines are set on foundations. --- skids are set on the 22 foundations, re-piping phase, wilh== is a major consideration. A • 23 compressor station of this magnitudA also has many support sys- 24 tAms, instrument air systems, glycol heating system, electric 25 systems, instrumentation, and. all of this is detailed, high R & R COURT. REPORTERS 829 WE&T EIGHTH AVENUE-SUITES 277.4713 ANCHORAGE, ALASKA 99501 -^ i i 1 2 3 4 5 6 7 8 9 1Q 11 12 ~_,~ 13 14 15 16 17 18 19 20 21 22 • 23 24 25 -~ 1 caliber-type of work that must be done. To get the proper technicians and people on the jobsite to have this work performs will also consume a considerable amount of this. time. Some of that can and will be done concurrently to th® other phases; all of it won't be performed concurrently. The building must be up erected./over the compressor station,.-the lines .from the plant and the compressor station must be connected, excavation of the lines, ..-te~~ in- of the existing facilities must be accomplished. In .our estimation it would simply require the amount of time tha we've estimated to do this job. We plan to work six days a week, ten hours a day, is our construction schedule. MR. GILBRETH: You mentioned that after the Order of the Committee was issued last year that you had to sample to determine the composition of the various streams there. ICI The information that you had thQn, I assume, was insufficient for design purposes? MR. ROBERTS: We had, of course, --- we sampl on a frequent basis. Mainly at the onshore facility. Our analy- sis was approximately three to four months old. There were also samples under different conditions than we would be operating under with the new equipmnt. To make the adjustments to determine the proper-separator conditions, we felt it was necessazy to, do a good enuineerinq job. to acquire new samples. MR. GILBRETH; In other. words, as I understan R & R COURT REPORTERS 823 WEST EIGHTH AVENUE-SUITE S 277-4713 ANCHORAGE, ALASKA 99501 Pegs 12 1 it thin, the previous testimony you've given us was based on 2 the best information you had available, but when it came to- 3 actual design you had to go back and re-sample and re-figure, 4 is that right? 5 MR. ROBERTS: 2 think that's correct. 6 MR. GILBRETH: You mentioned early. in your ? testimony that the dry gas reserves in the McArthur River Field 8 ,was the only reason that the line could be justified; it could 9 not be justified on the basis of the. solution reserves. Are 10 you in a position or will..any~ne ~b~e . in.:a=position to testify as li to the reserve that you're figuring for justification_of this 12 line? . • • 13 if ' ~! y m :not in a position:to test MR. ROBERTS: I ~ 14 to that information. Since we have installed --- since we have ', • 15 .installed the facilities and are going to transport the casing- 16 head gas, wr simply didn't think that was pertinent to this 17 hearing. I'm not aware of any other testimony that will report 18 on that either, Mr. Gilbrsth:. 19 MR. GILBRETH: You did indicate that your 20 final cost will be in excess of $25 million then to moves these 21 reserveG to the past side? 22 MR. ROBERTS: Yes, sir.. 23 MR. GILBRETH; What. condition --- what will 24 you be extracting from the gas moving to the east side, or what 25 will be left in the gas once it gets to the east side? Your R & R COURT REPORTERS 81D WEST EIGHTH AVENUE-SUITED .277.4713. ANCHORAGE. ALASKA 99501 ~° 1 Page l3 ' . i liquid .removal figure? MR. ROBERTS: The --- nominally speaking, 2 • the LEX plant which processes the vast majority Gilbr`e~,..h Mr 3 , . 4 of the gas going into this particular system recovers over nin~t - 5 five per cent of the butanes and heavier;. all of. the pr©pane g will be left in the stream. It is this propane ccntent that 7 might-allow thz gas to be in a retrograde condensation situation. g The other likelihood of possibility of liquids entering th,y 9 line, - ::simply'. when the plant is down for maint~nanc~ or is 10 down due to some mechanical failure, at this time within-the it heavier ends that are-now recovered from the plant could enter 12 the line. Iv would be these liq~:ids that w~ would ':p.g out if '~ 13 these liquids do occur in the hne; it would be these types. of 14 liquids that we'would '~Pq out. I might comment a little bit 15 furthflr here and tell you that a witness that will follow me 16 will go into more detail concerning the past side liquid facili- 1? ties'and could .perhaps better answer your questions in .that 18 area. 19 MR. GILBRETH: You're not significan ly 20 changing the design of the LEX --- present .LEX installation? 21 MR. ROBERTS: The only reason for the 22 modification at all is to simply process more gas. • 23 ~ MR. GILBRETH: That's all I have, Mr. Burrell '24 MR. ROBERTS: I mightmention ~ to your Grayling sand 25 request for information pertaining to the/gas/reserve is that I R & R COURT REPORTERS 829 WEST EIGHTH AVENUE-SUITE 9 .277-47 t 3 '~° l ANCHORAGE, ALASKA 99501 ` Page 14 'f.~ I~ 1 2 3 4 5 6 7 8 9 10 i 11 12 13 ' 14 15 16 17' 18 19 20 21 • ZZ 23 24 25 1 order of would be happy to give you a/magnitude type number. MR. GILBRETa: Well, I was curious about the solution "reserve, stating that it was so low, and that the=.==- ~ .only with the dry gas that it could be justified.. Canyou'-give -, us,a ballpark magnitude? MR. ROBERTS: We estimate --- let's see if I cam find my --- (pause) --- these are, like I"-say; order of magnitude numbers, and. we estimate that the solution gas avail- able for transportation after platform fuel, liquid stream into Trading Bay the LEX unit, and theJproduction facilty fuel requirements, and assuming that the operation goes into effect on November I, that. there will be about 33 billion cubic feet `of gas from the Trading Bay Field --- Trading Bay and the McArthur River Field. About 33 billion cubic fe~a of gas.. Now, depending upon the abandonment pressure. that you select, there's in the area --- in the neighborhood of 500 billion cubic feet of gas reserves in the McArthur River Field. So you can see the range. " MR. GILBRETH: That's. all I.have. MR. BURRELL: Mr. Roberts, I.have two or three .questions here. Back to one of Mr. Gilbreth's points, ih fact a couple of them. One. of them there, he:re~riarked on your the statement that/casinghead or solution gas alone would not justify the line, it was the dry gas reserves that would. Did you not use the word economic when you made your statement? I recollect that you said economically justified, is that right? R & R COURT REPORTERS 825 WEST EIGHTH AVENUE-SUITE 9 ~ - 277.4713 ANCHORAGE, ALASKA 99501... Page 15 ~ • 1 MR. ROBERTS: Yes,. sir. 2 MR. HUBBELL : So what you are saying is ~- . ... 3 the gas itself will not justify;it;= you did .not consider any 4 other products that might justify it; you're speaking of gas 5 alone, right? 6 MR. ROBERTS: Yes, sir. 7 - MR. .HUBBELL: It's: possibleathat.there might. 8 b~ another product being produced in the same. field that might g have enough profit built into it that it might justify it also 10 if that were a condition of it? 11 MR. ROBERTSz I'd have to --- 12 ~ MR. HUBBELL: I believe there's another ~ d over there d id th t' fl ~ 13 . s pro uce a u 14 MR. ROBERTS: Are you referring. to oil? 15 MR. HUBBELL: Yes, sir. 16 MR. ROBERTS: Well, to answer that question, 1? I believe we would have explored more thoroughly --- we-would lg have given considerable more thought ---I don't want to indicata 19 that we didn't give considerable thought; I want`to say wR would 20 have found a way of storing this gas perhaps that would have of don't 21 precluded the major --- this large/an investment. I/want to nfe I 22 that we wouldn't have complied with your Order if that large a ~' • 23 reserve was not there; I'm emphasizing the fact that our previou 24 testimony did state that transporting this gas was uneconomicall • 25 E feasible, and I wanted to indicate that it still was. R & R COURT REPORTERS B26 WEBT EIGHTH AVENUE-S.U 1TE5 277-4713 ANCHORAGE, ALASKA 99801. 1 Page 16 1 MR. BURRELL: Right, and I just wanted to 2 clarify that when you're speaking about transporting the gas as 3 being uneconomical, you're speaking about the gas alone separate 4 MR. ROBERTS: That is correct. 5 MR. BURRELL: Thank. you. Let's see, on the 6 LEX plant shakedown or de-bugging which is going to take slightl. 7 over three months from ..late July until November lst possibly, . 8 that`s your estimate; it may not take as long, is that right? 9 MR. ROBERTS: Well, the terminology of 10 de-bugging will be to require that length of-time is not exactl 11 correct. The de-bugging is a terminology that's usually employ 12 after the plant has been completed, ready to attempt start-up, i i f tim i d 13 s w e o o until the time it is operational, and that per 14 a-thirty day period range, perhaps. a few days less, not the thr ~15 months as required for the construction phase as well as the 16 de-bugging.. 17 MR. BURRELL: It's construction and de-bugg 18 then? 19 MR. ROBERTS: Yes, sir. 20 MR. BURRELL: Now, the other --- the next 21 item, I think, --- the other item that's the next .biggest cause 22 - will for lack of abetter word, as I recall, the dela if ou , Y, Y • 23 is-the liquid handling facilities at the .east side. 24 MR. ROBERTS: That's correct. 25 MR. BURRELL: Was the date on Ghat mid- R & R COURT REPORTERS 828 WEST EIGHTH AVENUE-SUITE E 277.4713 ANCHORAGE, ALASKA 89501 '~' 1 . ~ ~ ' Page 17 • 1 October, or what was the --- 2 • MR. ROBERTS: Yes. Ede expect completion 3 about October 1. - 4 MR. BURRELL: About October 1 on that. 5 MR. ROBERTS: And de-bugging operations 6 to require to October 15th toy--- 7 MR. BURRELL: Uh-hmm. $ MR. ROBERTS• --- be operational. The main 9 deterrent to this is the delivery of the equipment involved 1Q in that .extracting liquid handling facility. 11 ~ MR. HUBBELL: It's possible that both of those 12 two late items, if you will, or delaying items could be expedited, ~~ lt fi i 13 y, cu f if they de-bugged out without much d for instance , 14 construction went well. In other words, you`ve taken the maxi- 15 mum date or maximum reasonable date? 16 MR. ROBERTS: tae certainly feel that we've 17 asked for a period of time that will allow us without any other 18 undue or foreseen emergencies that we can comply with this by 19 November 1, yes, sir. 20 MR. BURRELL: That's all I have. Thank you, 21 Mr. Roberts. 22 MB. ROBERTS: Thank you. • 23 MR. ANDERSON: Mr. Chairman, this is Bob. 24 once Anderson/again. Our next witness --- 25 MR. HUBBELL: Excuse me, Mr. Anderson, for. R & R. COURT REPORTERS 82i! WEST EIGHTH AVENUE-SUITE 3 z~~.a~~a ANCHORAGE, ALASKA 89301 .~.1 i i 1 2 3 41 5 6 7' 8 9 10 11 12 ~~ 13 i 14 15 16 17 1$ 19 20 21 22 i . 23 24 • 25 ~1 Page 18 interrupting, I forgot; will Mr. Roberts be available should anybody else have some questions of him during the course of phis hearing? MR. ANDERSON: Yes, he certainly will. One other point, Mr. Roberts, were these exhibits prepared under your direction? MR. ROBERTS: Yes, they were. They're --- (inaudible -too far from microphone). MR. ANDERSON: Ws offer the exhibits from Mr. Roberts' testimony. into the record. MR. HUBBELL: Mr. Anderson, are those Exhibits One through Four?~ MR. ANDERSON: One through Six. I~ MR. HUBBELL: Six, One through Six. You don`t. by any chance have small size reproductions of these? MR. ROBERTS No, wa do not. MR. HUBBELL: All right. MR. ROBERTS: We'd be happy to make them for you, MR. HUBBELL: No, that's all right. I just wondered. All right, we'll ~.ccept these into the record unless there's an objection. Exhibits Ona through Six. How do you want those identified? Others may have exhibits also. MR. ANDERSON: Probably Pipeline Exhibits On ~~ through Six. R & R COURT REPORTERS: 825 WEST EIGHTH AVENUE-SUITE S 277-4713 ANCHORAGE, ALASKA 89501 '~ 1 • 2 3 4 5 6 7 8 9 10 it I2 • 13 14 15 I 16 ~! 17 18 19 20 21 22 • ~ 24 25 ~1 • ' Page 19 MR. HUBBELL; All right. M~. ANDERSON: Mr. Chairman, our next witness will be Mr. Jim Church of Union Oil Company. Mr. Church was qualified as an expert witness at a public hearing on October 30th, 1969 in regard to Conservation File No. 82. In addition to the qualifications presented at that time, Mr. Church has bee responsible far design and construction of .gas processing faci- liti~s in the Kenai Gas Field, and has earned the dLgree of Master of Science in Engineering Management with a 4.0 average, as a matter of fact, from the University of Alaska. He has been qualified and registered by the-State of Alaska as a ProfassionGl~ Mechanical Engineer No. 2204E. Mr. Church will give additional testimony on the pipeline system, specifically the liquid recav,ery on the east side, as well as a s®parate system, the east. side .system. idr. Church. MR. BURRELL: Thank you. MR. CHURCH: Good morning, my name is Jim Church.. At the present time I'm Union 0i1 Company's Project Engineer far the gas gathering system to be built for_marketing_ gas produced on the west side ®f Coak Inlet. My principal ~I responsibility is engineering design for those parts of the project which will be constructed and operated by Union, namely thfl marina pipelines, the two eastside pipelines,. and the east.- side gas handling facility. My purposes today is to report on the work done to datQ and the work remaining to b~: done to market R & R COURT REPORTERS 823 WEST EIGHTH AVENUE-SUITE 3 277-4713 ANCHORAGE, ALASKA 99501 i __ I• .'Page 20 oilwell gas produced from the Shell-AMOCO Middleground Shoal platform and the AMOCO Granite Point .platforms. For the sake of clarity and convenience I will hereafter refer to .this gas as east .side gas. Similarly, I will refer to the gas originatinc on the west side of Cook Inlet as west side gas. Gas from the Kenai Gas Field will`be referred to as Kenai gas, As Mr. Roberts has told you, Union initiated studies to determine the feasibility of constructing a liquid extraction plant on the east side of Cook Inlet to be located in the North Kenai industrial complex. The purpose of such a plant would .hays been to extract propane and residual. butane from both the west side and east si3e oilwell gas streams.. Based on preliminar results, Union entered into agreements to purchase oilwell gas and produced from the Middleground Shoal Field/from AMOCO's GranitL Point platforms. Point of delivery to Union will be the Sh~ell- AMOCO onshore site on East Foreland. Subsequently, more detail® studies of the proposed extraction plant wire undertaken. Speci fications were prepared and submitted to several firms for design and construction quotations. By late November 1971 it was clear that a plant large enough to process the combined east-west gas streams could not be justified. New studies were initiated to determine the feasibility of constructing a smallez plant to process only the east side gas. By late December it was apparent that neither plant could be justified. During the time these plant studies were being conducted, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 °c~ l R & R GOURT REPORTERS 926 WEST EIGHTH AYENUE-SUITE S 277-4713 ANCHORAGE,.ALASKA 99501 I page 21 °~ the 1 Collier Carbon & Chemical was analyzing potential uses of/oilwel • 2 gas. .Collier's initial studies. have been based on the use of 3 residue gas from an extraction plant which would have approxinat ly 4 the same heating value.as Kenai gas for which the plant systems 5 were originally designed and constructed. West-side gas, as it 6 .leaves the existing LEX plant, has a higher heating value than ?I Kenai gas since only butane and the heavier hydrocarbons are 8 removed. East side gas has an even higher heating value sincz 9 it is not. processed at all beyond removing liquids which con- 10 dense.from the gas during transportation. For this reason,.. I1 Collier had to make additional studies after plans for the west 12 side plant --- for the east side plant were abandoned to deter- • 13 mine if the west and east side gas streams could be used for 14 full as delivered, that is without processing. The problem was ~ 15 compcundad by the following facts: one, the east side: gas 16 volume is not sufficient to satisfy all fuel requirements and is 17 declining.; both the east-and west sidA gas streams are subject 18 to interruption due to piQeline digging operations, equipment - 19 malfunctions, and so forth; three, west side gas is .subject to 20 considerable fluctuation in heating value because. of variations. - 21 in thQ volume and composition of thQ streams that comprises the 22 total west side. stream and bypassing the LEX plant when it was • 23 down. Collier concluded they could take the gas, but to do so 24 would requir° substantial modification of their fuel systems,.. 25 s out. such as changing burners, modifying existing instrumentation and R & R COURT REPORTERS B27 WE7T EIGHTH. AVENUE-SUITE ! - 277-4713 ANCHORAGE,ALASKA 99501• 1 t~ I'• I• • 11 21 3 4 5 6 7 8 9 10 it 12 13 14 15 16 17 18 19 20 21 22 23 24 25 i ;~ 1 • • Page 22 control systems, and adding nQw instrumentation syst~an to allow rapid changQ from one fuel source to another. These changes are now being. made .during Collier's annual plant turnaround. During the time Collier was stud ring the feasibility of taking oilwell gas, Union .was analyzing alternative methods of transporting east side gas to the Nikiski area in order to be in position to make a decision and start work at the earliest pos- Bible time. Three alternatives were available, and a choice could not be made until Co11iQr's position had been defined. These alternatives were: one, install compression equipment at the Shell-A,'~Z000 onshore site and deliver east side gas at .high pressure or about 1100 pounds per square inch into the sixt~an inch pip~linQ carrying the west side gas; two, install compressio diameter ,equipment at Shell-A~nZOCO on a small/pipelines from there to Niki- ski and deliver east side gas at an intermediate pressure, betwa~ 650 to 1100 pounds; number three, install a pipelines between Shell-AMOCO and Nikiski and deliver gas at low pressure.. The first alternative would .have been required to deliv~:r east side gas to the Swanson River Unit f®r injection. The. second was abandoned along with the sxtracti©n plant:plans. Thr third alternative was selected. Under this plan, east .side. gas will be delivered to Union at approximately 175 pounds at the Shill-AMOCO onshore sitA. It will be transported through a ten and threfl-quarter by quarter inch wall pipeline for delivery to the Collier plant at 135 pounds. This pipeline will be laid R & R COURT REPORTERS 823 WEST EIGHTH AVEHIJE-SUITE 9 277.4713 ANCHORAGE,ALASKA 99501 Page 23 Fi i alongside thQ sixteen inch pipeline which Mr. :Roberts has alrzady • 2 described. 3 Hobbs-Bannerman Alaska Corporation was retained in mid- 4 January to assist with the pipeline projact. J. M. Covington. 5 Corporation in Santa F9 Springs,-California was retained to com- g plate a portion of the eng~neer~:ngwork within Collier's plant. 7 Engineering and operations personnel,; both Union and Collier, . g met to review Collier's ryquirements for gas delivery and g quality, tc reviYw preliminary engineering plans, and to Lsta- 10 blish dQsigr. policy: The principal design crit:~ria established: 11 were: number one, absolute reliability must be maintained with 12 respect to both gas supply and gas .quality; number two, the • ' 13 order of priority far gas delivery to thQ Collier plant would bw 14 east side gasfirst, west side gas second, Kenai gas last.. 15 The .basic problem was to design a reliable system capable a 16 of continuously delivering/liquid free gas supply to Collier ~ 17 in the Swanson River Unit rather than putting gas to flare during i 18 opera~ional upsets. .The problem of interruptibility would b,e 19 overcome by using .gas from the Kenai Gas Field as a backup which 20 will automatically feed Collier and the Swenson River~Unit in ~21 the event of interruption of the east and west side streams. 22 Removing liquids from the east and west streams to meet • 23 contract specifications without pu*ting some or all these streams 24 to flare required more imaginative. solutions. Considerable 25 engineering time was required to crate such a design and carry. R & R COURT REPORTERS 82D WEBT EIGHTH AVENUE-SUITES 277-4713 ANCHORAGE,ALASKA 89501 °° 1 '• 1 • 2 3 4 5 6 7 8 9~, 10~ 11 ~ 12 ;' • 13 ', 14' ~15 16 17 18 19 20 21 22 • 23 24 25 i ~~i Page 24 it through the evolutionary steps from the idQa stage to an acc~ptabin mechanical design compatible with practical operations plans.. Before describing the endpoint facilities, it is necessa y to explain why liquids;condsnsate is a potentially severe prob- lem. ~ East side gas will be delivered to the pipeline with ;oxTl' the free liquids knocked out, and "thus will be delivered at the ':hydrocarbon dew point. Basic delivYry calculavions indicate normal behaviar~of~this-gas as opposed to r_trograda behavior. The drop in gas temperature through the line would favor hydro- carbon condensation; conversely, a drop in prvssurz would inhi~ condensation. Both pressure and temperature reductions will ' occur in the pipelinQ. These reductions will be largely indep- sz~dent of onQ another and the respective magnitude will fluctuate from~day to day dum to variations in deliv?ry prassuz i flow rate, season of the year, and other reasons. Whither or I~ .not condensation occurs on a particular day will depend on the I ~~ net effect of the two opposing influences, pressure drop-and temperature drop. West side gas is normally processed in an LEX plant. If, however, the LEX plant were down and being bypassed, we expect to Nava vondensation occurring in the pipeline between West Forr Land onshore site and the marine pipeline terminus at East For; land at a rate of about 1600_:.barrels a~da in the winter, 47 y million feet per day flow rats. Basted on the excellent LEX R & R COURT REPORTERS 825 WEST EIGHTH AVENUE-SUITE 8 277.4713 ANCHORAGE, ALASKA 99501 Page 25 1 operating history, this condition is expected to occur only • 2 about two per cent of the time, or seven .days a year. Therefore 3 we must either provide facilities to- remove these .liquids safely 4 ar we must put the gas to flare during periods when condensation 5 would occur.. W~ have chosen to remote the liquids. 6 Mechanical dflsign we have developed to take. care of this 7 problem is illustrated by the flow sheet labeled Exhibit A. 8 Assuming an upset condition exists and condensation is occurring, 9 we would pig the west side marine pipelines frequently to preven 10 large accumulations. By the time ~-p~].rg_ had reached East Fore- it land, it could have as much as 1200 to 1600 barrels of highly ' • i2 volatile hydrocarbon liquids ahead of it. To remove these . . 13 liquids from the ling as they arrive would require an Lxcessival~ 14 large facility since they will be arriving at a flow rate on 15 .the order of 100,000 barrels a day. These liquids would be low 16 rnturnQd to gas and flashed to/pressure at a rate in excess of 17 130 million cubic feet per day. There's no way the flash vapors 18 could be .used when evolving at this rata, therefore they would 19 have to be burned. In order to reduce facilitysize and at the 20 s?me time to conserve flash vwpors, the pipeline being gicked 21 will b~e shut in automatically when 'rho liquid slug arrives at 22 East:Forelarid. The slug will then be withdrawn. at a con- • 23 ® trolled rate from the one pipeline over a peel d of several hours 24 while the o':her pipelin=e is left in operation. As soon as the 25 liquid.is cleared fram one line,~the other line will be ~.3.:gged R & R COURT REPORTERS 823 WEST £IG HTH AVEN UE-SUITE S 277-4713 °~°1 ANCHORAGE,ALASKA 99501 i I• 1 to remove liquids from it. By alternating between the two lines in this manner, we plan to maintain continuous operations and thus avoid flaring during LEX upsets. To continue with th~ flow: diagram, liquids removed from .the marine lines will be passed through a line heater to ncr.ase vaporization at subsequent steps and then into a first stage flash vessel operating at about 190 pounds. Vapors off this flash drum which will amount to about 945 standard cubic feet per barrel of condensate will be transported to the Shell-AMOCO site through a four inch pipeline. There it will inter the ten inch pipeline from Collier . This facility will be operated so as to limit the gas rate off the flash .drum to between six and eight million standard cubic feet per day =to:`~en~bls Collier to use these flash vapars. Gas entering the sixteen inch east side pip«line will be enteredatthe hydrocarbon dew point and thus will behave generally in the same fashion as the gas in the low pressure ten inch pipeline with respect to condensation. For this reason it must pass through a separatar a~ the Kene.i. pipe- line junction before being delivered to Swanson River Unit a.nd ~c Collier. Any liquids dropped into this separator will be dumped to the low pressure ten inch line for subsequent disposal. .From Kenai pipeline junction, west side gas will be transported to Collier at high pressure through a sixteen inch pip~elina. Thre it will pass through a line heater and its pressure will ba reduc to about 130 pounds for blending with east side gas. Gas and 1 2 3~ 41 5i 6 7'' 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 R & R COURT REPORTERS 82S WEST EIGHTH AVENUE-SUITE 3 277-4713 ANCHOP.AGE, ALASKA 99501 • 1 • 2 3~ i• 4 5 6I 8 9 10 11 12 I3 14 15 16 1? 18 19 ~, 20 '~ 21 22 • 23 24 25 1 Page 27 liquids from the low pressure ten inch link will pass through a . separator before being blended with west side gas. After blendi g the combined stream will pass through one additional separation stage before boring metered to Collier. After extensive plant modifications, Collier will usa approximately 17 million cubic fe t per day of east side gas. Another 8 million feet of west side gas will be blinded wish it to make up the total 25 million feet per. day r~:quireme~~t. Shoup. the east side gs.s supply f~.il, up to 30 million cubic feet per day of west side gas would feed into the plant if available, ~a greater volumes required due to its lower heating value. If both sources fail to deliver enough gas, then Kenai gas will automatically be passed through Collier's fuel system. ' The major items remaining to be done before we can accepv east side gas for dzlivery ±o market are the construction of the ten inch pipeline from the shell-AMOCO onshore site to Collier, and the construction of the ~ndpQint facilities. Thy pipeline contractor has been s~~lected, construction will commence early j in May. WL= plan to hay-e the pipeline in place and tested by July 15th. We have dispatched a member of our project engineeri g team to the .National :Taixk~~ Company' :: plant in Tuisa, Oklahr~ma to expedite fabrication of equipment. Delivery of the equipment II in Alaska is projected during ~,he first week or during the week of August 14. Allowing six weeks for installation, the faciliti s will be ready for start-up by October 1. We will berm an R' & R COURT REPORTERS 82D WEST EIGHTH AVENUE-SUITE 3 .. 277.4713 ANCHORAGE,ALASKA 99501 ,;~ • i~ 1~ 2 i, 31 4 5 6 7 8 9 10 11 12 13 ~,I 14 15 16 17 18 is 24 21 22 23 24 25 "~° • operational status by October 15. To summarize my remarks, designing and constructing adequatefacilities with which to market east side qas is a large and complex project and must bs coordinated closely with the project for marketing west side gas to achieve our goal of maximum c©nserva±ion of gas. The work has begin carried forward with diligence and. dispatch and will continue to be until com-" plated. The pipeline to transport :vast side gas will by avail- able about July 15th. The process or endpoint facilities. require ~o meet contract quality specifications will be comgletely instal led by October lst. As a point of information, Exhibit A is a simplifi¢d version of our process flow sheet prsparad under. my direction. ' This concludes my prepared remarks. In the interest of ~~ brevity, I have touched on only a few of the highlights of th® project. I'll attempt to answer any questions. you may now have. MR. HUBBELL: Thank ycu, i~ir. Church. MR.~ GILBRETH: Mr. Church,. the liquids that are; collectdd from this point, will they be sold as oil an the east side? What will be the disposition of the liquids collecte3 MR. CHURCH: At this point in time, I'm not sure. MR. GILBRETH: The line from the Shell-AMOCO facility will be a low pressure line, is that right, from there to Collier? R & R COURT REPORTERS 82S WEST EIGIiTH AVENUE-SUITES 277-4713 ANCHORAGE,ALASKA 99501 i~ i• I• 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 '~ 1 • MR. CHURCFis That's right. MR. GILBRETH: And will be independent of the high.nressure line then, th other line? I'~, MR. CHURCH• Yes. MR. GILBRETH: I have no other questions. MR. BURRELL: I have a question, rir. Church,. on thos= dates again. If you were allowed to flare the liquids at East Foraland, in other words, if the LEX plant went down and you hsd a bunch of liquids in the line and you flared them there ra}her than knock them out of the system, how soon could you go operational? In other words, what's the delay till Octabyr 1• is that knockin the liquids out at East Foreland g I or --- MR. CHURCH: No, --- MR. BURRELL: --- is thwt quality standards? MR. CHURCH: --- the startup time would be the samA. MR. BURRELL: It's quality standards. is the reason for delay, --- MR. CHURCH: duality standards. MR. BURRELL: --- rathzr than b,aing able to handl the liquids in the event the plant --- MR. CHURCH: That's right. MR. BURRELL: ----goes down. MR. CHURCH: ThQ gas delivered bo both the '~I R.& R COURT REPORTERS 829 WEffiT EIGHTH AVENUE-SUITE 3 277-4713 ANCHORAGE,ALASKA 99501 1 • 2 3~ 4i 5~ 6' 7 8 9 10 11 . 12 13; 14 15 I6 1? 18 i9 2a 21 22 • 23 24 • 25 1 • Page 30 Unit. Swanson Riverjand to Collier must bye liquid free. MR. BURRELL: Okay, that's all I-have. Does anybody have any other questions? Will you be available during the hearing --- during the rest of the hearing, Mr. Church, in case anybody else has some questions of you? MR. CHURCH:. Yes, I will. MR. BURRELL: Thank you. And I think --- let the record rQflect we'll accept this sa --- MR. ANDERSON: Exhibit A. MR. BURRELL: Yeah, it's Exhibit A, but which one? MR. ANDERSON: Pipeline Exhibit A. MR. BURRELL: The others were numbered, ~~ wQren't they? MR. ANDERSON: Yes... MR. SURRELL: Pipeline Exhibit. A. -With ~ your --- unless there`s an objection, we'll accept one of these co ies of it rather than the large scale one. r4r. Marsh311 who P is custodian of the exhibits advises me that I goofed on accepti g those large ones previously. Mr. 'Roberts in that he doesn't have a file draper big. enough to put them in. MR. ANDERSON: Would you like to have those reduced to something smaller, eight and a half by eleven, or --- MR. BURRELLc Yes. MR. ANDERSON:. --- around. that size? R & R COURT REPORTERS 825 WEST EIGHTH AVENUE-SUITE E 277-4713 _ ANCHORAGE, ALASKA 99501 ~,~ `• • 1 2 3 4; 5 6 7 8'~ 9 10 11 12 13 14 15 1s 1? 18 19 20 2i 22 23 24 25 1 • • Page 31 -i MR. BURRELL: Yes. If that could be done, we'd appreciate that. If you can reproduce them, we'll accept those as Vhe official exhibits rather than theses large ones. Thank you. ! MR. ANDERSON: That will be done. Mr. Chair- I - man,and members of the Committee. This concludes the-pipeline ~ syst©m por~ion of the testimony today. we'd like to move now into the individual fields and the respective. orders in Conser- vation Files reflecting the field. To begin with, we'll hive testimony from Mr. Richard Keller regarding Conservatibn.File the No. 104.covering,~icArthur River Field. Mr. Keller-has not pre- viously presented testimony before this Committee, and therefore he will present his qualifications at this time. MR. KELLER: My name is Richard Keller. I received my .Bachelor of Science degree in Petroleum Engineering in 1964 at the University of California et Berkeley. I joined the Union Oii_CompMny in 1964 as a petroleum engineer. Since that timfl I've held various staff and supervisory pasitions involving petroleum, reservoir, and production engineering. I was transferred to Anchorage, Alaska in Junk of 1971 as Area Engineer. My duties include supervising production ~sngineQring personnel involvad in the design and construction of oil and gas facilities for both onshore and offshore. I am a member of the Society of Petroleum Engineers of A.I.M.E. MR. BURRELL: Unless there's objection, we'll R & R COURT REPORTERS 825 WEST EIGHTH AVENUE-SUITE 3 a~~-a~~3 ANCHORAGE,ALASKA 89501 Page 32 • i 1 accept Mr. Kelley's qualifications as an expert witness. • 2 MR. KELLER: As I statsd, my Hama is Richard ',I 3 K211er, and I'm currently Area Engineer for .Union Oil Campcny, 4 Anchorage District, Alaska. (Testimony of Mr. Kellar attached ~, 5 as an exhibit to this transcript.) That concludes my testimony. 6 MR. BURRELL: Thank you, i~ir. K811er. i~ir. 7 Marshall, any questions? Pair. Gilbr~eth? • 8 PAIR. GILBRETH: Yes., sir. Mr. Kallar, you 9 mentioned that all the platforms in the McArthur River Field 10 would be ready to deliver gas to shor6. Are vher~e dry gas { 11 reserves undLr the Dolly VardQn platform sthat-~ caill bs delivered . 12 to the "roes? ' 13 PdR. KELLER: Nat to my knowledge Gt this time. 14 MR. GILBRETH: L~]3s there additional ~quipm~nt ; s 15 installed on the Dolly VardQn platform after the Consarvati~on 16 Committer Ordflr was issu®d last Juns for the purposes of trans- 17 porting. gas to shore? 18 - MR. KELLER: No, I don't believe so. 19 MR. GILBRETH: In otherwords, this is th~• 2© same equipment that was in there before the Order was issued. 21 Wa hire additional e ui ment installed on either of th~s other s t q P 22 platfarms after thy-Order was issued? • 23 MR. KELLER: I don't know when the 1.100 horse 24 powQr compressor was installed on the King, whether it was insta l~:d 25 r not O d h . er o r after t e R & R COURT REPORTERS - 92E WEST EIGHTH AVENUE-SUITE 3 277-4713 ANCHORAGE, ALASKA 99501 °° 1 1 • Page 33 4• ~1 MR. GILBRETH: Has there been additional 2 equipm®nt ordered for the platforms for the purpose of moving 3 gas to shore since tha Order was issued? 4 MR. KELLER: Nat to my knowledge, no compres- 5 Sion equipment. 6 MR. GILBRETH: All right, that's all I have.. ? MR. BURRELL: Mr. Marshall? Thank you. very $ much, Mr.~Keller. Will you be available in case there's any 9 subsequent queston~~ 10 MR. KELLER: YL=s. 11 MR. BURRELL: Thank you. 12 MR. ANDERSON: Mr. Chairman, members of the ~. 13 Committee. We have one further witness with relation to Con- 14 s~rvation Order 104, the McArthur River Field, and that is Mr. '15 C.J. Diver who was qualified as an expert witness at a public 16 hearing held August. 27, 1970 regarding Consarvatien File No. 95. 1 1? MR. DIVER:. My testimony this maorning will 1 $ be very brief inasmuch as I have dealt at other hearings bafore 19 the Committeewith the question of the effect of shut~ng-in 20 production. Any suspension or shutting in of production in the 21 McArthur River Field which would b~ necessary if an extension 22 of timD for compliance with Committee Order 104 is not granted, 23 will,. in my opinion, carry with it-the risk of decreasing the 24 ultimata recovery of oil from the field; and in this regard, L { 25 rQguest that pertinent portions of my testimony relating to the R & R COURT REPORTERS 82S WEST E16HTH AVENUE-SUITES 277.4713 '~"1 1 ANCHORAGE, ALASKA 99501 • ~1I • 2 3 4 5 6 8 9 10 ii 12 13 14 - 15 16 i? 18 19 20 21 22 23I 24 25 II 1 Page 34 hazards of shutting in production, given at the_Committee's public hearing held August 27, 1970, concerning Conservation ~~ File 95 dealing with use of .gas well gas for lift purposes when compressors ire down, bQ incorporated as part of my testimony today. I also request that pertinent supplemental data there- after submitted and made a part of the record of that hearing and supplemental data and testimony submitted for Conservation File No. 95, be incorQorated as part of my testimony here today. NIR. BURRELL: U~ithou} objection, we'll incorporatQ that, Mr. Diver, on the condition that the questions and answers that related :to the same area also be incorporatAd. The Committee has some questions to ask you on that field. Mr. Gilbreth. MR. GILBRETH: Mr. Diver, with regard to possible damage. resulting from r4striction of production, I am wall aware of the prior testimony that has been given on this. If it became necessary to r®sLrict production, would it nod be logical tc restrict it first in the walls that had-the lowAst water cuts? MR. DIVER: From the evidence that~we have this would certainly be ':.he plac® that we would think that we would expect less damage there than in the wet wells. MR. GILBRETH: Just as a rule of thumb, weals arQ g¢nerally considered to be -making `~ significant am©urts of water when they get up into five, ten, fifteen per c~:nt range R & R GOURT REPORTERS 625 WEST EIGHTH AVENUE-SUITE 3 277-4713 ANCHORAGE,ALASKA 99801 11 2, 3 4 5 6 7 8 9 10 11 12 13~ ~14 ' 15 16 17 18 19 20 21 22 23 24 • 25 -'x 1 _ MR. DIVER: They'r$ making .significant quanti ties of water. This isn't to say that .you have to approach-that type of water cut before you will suffer damage in wells... I don b~licve they go togs:then. PdR. GILBRETH: I sir. In other words, you think thare maybe damage du® to wa~¢r from wells making less than five, or t n, or fifteen per cent? NiR. DIVER: Yes, sir. MR. GILBRETH: Do you know at this tima about what per cent of the production from tha field is from wells making less than five per cant water or just low water rates? MR. DIVER: approximately seventy to srventy- fiv® per cent of the production is produced from caells with surface rates of less than on® per cent water. MR. .GILBRETH: That's all I have. AiR. BURRELL: P~ir. riarshall? MR. MARSHALL: No. MR. BURRELL: will you likewise be available, Mr. Diver? - MR. DIVER: Yes, sir. MR. BURRELL: -Thank you,very much, sir. MR.-ANDERSON: Gentleman, this concludes our tzstimony insofar as Conservation Ordrr No. 104 is concerned. F.s has been demonstrated here this morning, Union and Marathon R & R COURT REPORTERS 825 WEST EIGHTH AVENUE-SUITE 0 277-4713 ANCHORAGE, ALASKA 99501 t ~~ i• 1 2~ 3 4 5 6 7 8 9 10 11 12 13 I 14 15 16 i+ 17 1$ 19 20 21 22 23 24 25 1 • • Page 36 took the casinghead gas bull by the horns and committedthem- selves to an extensive gas pipeline system. Mr. Roberts and Mr. Church reconstructed for you .the events to date and the projected-timing of future events which will see this project completed by November 1, 1972. I+ir. Keller testified that the Trading Bay Unit 'platforms, the.t?olly Varden, the Grayling and the King Salmon, will be physically prepar4d to deliver their excess. casinghead gas into this completed. system by November 1. Mr. Diver has reflectzd on damage that could be expected in .the event of prolonged restriction of production. The recerd on this point I tl'~ink is clear,-,based on the testimony both or:~l and writ*_en offered in support of Conservation Orders 92 and ' Conservation Order 95 and several amendments. . Gentlemen, the solution to thin problem is in~our :-.- grasp. November 1 will see completion of this pipeline system and the reduction of existing flared gas to a mere safety W therefore respectfully request that the Alaska Oil palot. e and Gas Conservation Commiictee amend Order No. 2 of Conservation Order 104 by deleting the date July 1, 1972 and substituting in its place .the date November 1, 1972. Thank you. MR. BURRELL: Thank y®u. MR. ANDERSON: We will move on now to deal with Conservation Order No. 103, dealing with the Trading Bay. Field and the .Trading Bay northQast. The first witness we have is~Mr. Keller. Mr. Keller has stated his qualifications earlie R & R COURT REPORTERS 827 WEST EtG HTH AVENUE-SUITE 3 277-4713 ANCHORAGE. ALASKA 89501 • 1 2 • 3 4 5 6 7 8 9 10 lI 12 ~.~ 13 14 15, 16 17 18 19 20 21 22 '~, I 23 • 24 25 ~~ J i -~~ Page 37 on Conservation File 104.E MR. KELLER: As I stated, my name is Richard Keller, and I'm currently Area Engineer for Union Oil Company,.. Anchorage District, Alaska, t-Ty purpose here now is to describe the gas to shore transpartation capability of the Monopod plat- form, Trading Bay Field. (Testimony of Mr. .Keller attached as an exhibit to this transcript.} That concludes my testimony. MR. BURRELL: Thank you, Mr. Keller. Questions? I~r. Gilbreth. ~ MR. GILBRETH: Mr. Keller, this equipment you m~f~tioned, five compressors totalling 7700 horsepower, ire '', these to b,e.install~ed on the Monopod? r~iR. KELLER : Yes , they ar€~ MR. GILBRETH: iaer~ they ordered after the Committee Order was issued last year? MR. KELLER: Yes, sir. MR. GILBRETH: Are there any dry gas reserves from the Monopod- that will go through this gas line? MR. KELLER: Not to my knowledge. MR. GILBRETH: Ia other words, this equipment. was ordered specifically to get the solution gas to shorn for movement? MR. KELLER: Yes, sir. MR. GILBRETH: That's all I have. MR. BURRELL: Mr. Marshall? R & R COURT REPORTERS 823 WEST E-GHTH AVENUE-SUITE 3 277.4713 ANCHORAGE, ALASKA 99501 _1- ' ~ P e , 38 ag G-,..• 1 MR. MARSHALL: No questions. • 2 MR. HUBBELL: Mr. Keller, do you have any 3 ballparkfigures on the cost of +,.he new equipment that was ordure 4 for the Monopod? 5 MR. KELLER:: It's. in the n~ighborhoad of 6 two million dollars. 7 MR. HUBBELL: In the neighborhood of two 8 million.'. Its sole purpose is to get. the casinghead gas to sh0rfl? 9 MR. KELLER: Yes. 10 MR. HUBBELL: Mr. Gilbreth? 11 MR. GILBRETH: I just want to make clear 12 this is to get all the casinghead ashore excflpt for the safety '~ ~ . 13 flare, is that right? 24 MR. KELLER: .Yes, sir.- 15 b1R. GILBRETH: That's all I had. 16 MR. HUBBELL: Thank you', Mr. 'r:eller, Please 17 remain available --- 18 MR. KELLER: Yes. 19 _ b'IR. BURR~LL: --- in case there ire any other 20 questions . 21 NIB. ANDERSON: Mr. Chairman, members of the 22 Committee. Our final witness regards-Conservation Order 110. lfl3 ~~ ~ will be Mr. B. C. Anderson of Atlantic Richfield Com an t~ir. P~ Y• 24 Anderson was qualified as an expert witness at the public hearin 25 _ on August - - excuse me, on November 13, 1969, regarding R & R COURT REPORTERS 825 WEST EIGHTH AVENUE-SUITE ! 277-4713 ANCHORAGE, ALASKA 99501 • T - Page 39 • 1 Gons~ervation File No. 83. Mr. Anderson's testimony will dial 2 with thQ Trading Bay Northeast area. B.C. 3 MR.jANDERSON: Before you are copies of the 4 exhibits that~I will•project on thfl screen; they are Qxact 5 duplicates. 6 - PdR. HUBBELL: Thank you. - 7 NiR. B . C.. _ .ANDERSON : I' d like o _ request -that $ these be accepted in thr r~cQrd. 9 MR. HUBBELL: We'll id~:ntify them as we see 10 them, and they'll be accepted in•~o the record. 11 MR. II.C. ANDERSON:. Gentlemen, my name is 12 B.C. Anderson. I'm the District: Engineer for Atlantic Richfield ~ 13 ` Com an South Alaska District. P Y, 14 The Atlantic Richfield Company operates Platforms 'A` and 15 Spark in the Trading Bay Field. Exhibi~ One shows the location. 16 of these platforms in relation to the other-platforms in the 17 .field, the outline of the unitized G and Hemlock north:.ast-oil i ~ 18 pool groductive limivs, and the Grani~a Poin:: onshore production 19 facilities. Conservation Order No. 103 applies_to the operation 20 of these platforms and requires that effective July 1, 1972 that 21 flaring or venting of casinghead gas from':the;:Trading-:.Bay-.Field 22 is prohibited except for the amount necessary for adequate safct • 23 flares and except in emergencies. Platforms Spark and 'A' da 24 not produce enough casinghead gas to meet their combined fuel • 25 requirements. R & R COURT REPORTERS 823 WEST EIGHTH AVENUE-SUITES 277-4713 ANCHORAGE, ALASKA 99501 1 Page 40 • 1 Exhibit Two shows casinghead gas availability and usag® 2 for these platforms under a minimum flare condition. The diagr 3 ~- also shows a as balance betw,.en these lay.forms onshore fuel g P 4 r®quirsments, and an outside makeup fuel~gas supply. Equipment 5 i§ available on the platforms for this type of operation.. On g Platform 'A',-some minor changes in piping will be rzquirmd and 7 an existing dehydrator must be put into operation bef©re gas cane 8 be delivered to shore on a reliable basis.. W~ expect Platform 9 'A'to be operating under minimum safety pilot conditions by July - 10 1, 1972. Outside fuel requir~emQnts --- outside requirements for 11 fuel are normally mat by the purchase of excess casinghead gas 12 from the Mobil aperated Granite Point platform. As I will show • 13 later, this source of fuel has be®n interruptible. Under timer- 14 gency conditions, a limited amount of fu~.l is also availabl.. I 15 .from ~~exaco's Nikolai #3 well for Platform 'A' or onshore fuel 16 requirem®nts. 17 Platform Spark is essentially a totally electric wired 18 platform and generates its own power. It has two 3500 KW genera- 19 tors driven by a 5000 horsepower Nordberg turbine.. At .the 20 pre3ent time, one generator operating at ninety-fives per cent of 21 its peak capacity is providing all platform ehctric power. The ~ othsr turbine driven generator is normally not operated and 23 serves only as a standby. As shown an the diagram, fuel requires- , with - 24 menu when operating/one turbine are 1400 mcf per day. Under the J. 25 conditions sh®wn, only 900 mcf per. day of casinghaad gas pro~iucad R & R COURT REPORTERS i 823 WEST E16 HTH AVENUE-SUITE S 277-4713 1 ANCHORAGE, ALASKA 99501 ~- • 1I 2 3~ 4 5' 61 7 g 9 10 ,11 12 • 13 14 ~15 16 17 . 18 19 20 21 22 23 24 • 25 I - 1 • ~ Page 41 on the platform is available for fuel. This means that 500 mcf per day of casinghead gas must come from shore to meat platform fufli requirements. Without an outside fuel supplyfor whin this service is interrupted, there is not sufficient fuel-gas for the Nordbarg turbine. 2t than becomes necessary to convert part of our operations to diesel fuel ~.nd flare more of the produced casinghead gas. Norberg turbines on .Platform Spark -car. .use Qithzr gas or.diasel, but tY~,ey cannot use a combination of these fuAls. Conversion from one fuel source tQ Gnother requires a shutdown of approximately four to six hours and causes a sub stantial risk of turbine damage due to the temperature: changers duringshutdown and startup. Company :~ As already indicated, Atlantic Richfield/has e:nter~d into contrac}s wi~..h riobil and Union ~:o purchase sufficient casinghewd gas-from 'hair GraniYd Point field operation to cornbinp with our gas production and mdet our fu?1 nes~ds. Con- tract pressure for dYlivery of this gas is 250 psig. .Exhibit the Three. Exhibit Three shows/amount end pressure of this gas delivred to our Granite Point cnshorQ facilities for subsequ`nt usa there and on'Platform Spark. .The Exhibit supports my pre- vious statdment that the service has bean interruptible. .Mobil does have equipmant_on ord~.r to provide gas at contrac~ pressure and to help alleviate some of the problems; however, even. with. the planned modifications, interruptibility-will not be complete y eliminated. 72 & R GOURT REPORTERS. - 823 WEST EIGHTH AVENUE-SUITE 3 277-47 t 3 ANCHORAGE, ALASKA 88501 I• 1 2I 3~ 4 I'~ 51 6 7' 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 • 23 24 • 25 l To ensure a dependable fuel gds supply, we are negotiating an exchange of gas with Union and Marathon that will enable us to obtain gas from the pipeline system currently being canstruc~e from the Trading Bay onshore production facili~..es -tc> the -~7orth Ksnai arse as a backup for the other sources. With this backup supply ws will be able to consistently utilize all excess easing. head gas produced on Platforms 'A' and Spark as fuel. Curtailment of production t® prevent flaring of excQss cwsinghead gas until a reliable supplemental fuel gas source is developed would impose a significant risk on future perfonnan and recovery of wells now producing in this field. This conclusion is primarily based on the perfor:~ance of wells on Platform Spark following a shutdown due to equipment failure in June of 1971. Exhibit Fcur. .Exhibit Four shows rate performance for i Wall S-2 for a period of time prior to the June 1971 shutdown and during subsequent attempts to return the well to oil pro- . f d on an avers ei duction. Prior to th.~ shutdown, th.. wrll produce g ratQ of about 600 barrels of oil per day with a water cut averag'ng about forty-five per cent. Its .production since the shutdown ha been essentially one hundred per cent water.. Other wells also suffered a loss in oil productivity and a corresponding incrzase~ in water cut as a result of the shutdown, but subsequently recovered. The explanation of .this performance may be c=tiss~flo producing ~ in the well bores. The water wet intervals fi/wells in this reservoir are probably affected by the limited water drive and R & R COURT REPORTERS 825 WEST EIGHTH AVENUE-SUITES 277-4713 ANCHORAGE,ALASKA 99501. i • • i• 1 2 31 4 5 7 8 9 10 I1 12 13' 14 . 15 16 17 18 19 20 21 22 23 24 25 ~1 • Page _4 3 haves a --- more affected by :the limited water drives and have a slightly higher pressure than those producing oil. With a shutin or limited-draw down situation, water could crossflow from the water bearing intervals in the well and cause high water s~.tura- tion in the oil bearing formation around the well bore. This. - ~ would .seriously reduce the relative permeability tdi oil... ;-. If any wall is Lost prematurely in the reservoir, undoubtedly the recovery from th9 reservoir will be adversely affected. In summary, I have shown that Platf©rms 'A' and Spark do not produce enough casinghead gas to meet their combined fuel requiremQnts. An outside source of fuel has been. obtained, and our flares are often restricted to minimum safety pilots now; however, the outside fuel source is interruptible and a backup supply is n:eded to, be able to consistently comply with the Order without production curtailment.: We expect the pipeline systbm currQntly being constructed from the Trading Bay onshore.. production facility to the i~torth KQnai area will supply this needed backup fuel. 5incfl-ths..pipeline cannot be in opera :ion until NovQmber 1, 1972., we believe .th~r requesg <~or"": the -extension or venting of the eff¢ctivs date for prohibiting~th~e flaring/of casingh ad gas ~'€=om.~ Trading Bay Field, except for the amount necessary for adequate .safe Yy flares and except in emergencies , ~o idoverai~s: 1, 1972 is reasonable.. ale rasnrctfully r¢questyour considyrwti~ of this extension. That concludQs my dir.:ct testimony. .Thank. you. R & R COURT REPORTERS 823 WE8T EIGHTH AVENUE-SUITE 5 277.4713 ANCHORAGE; ALASKA 9.9501 I• i• i ,. 1 2 3 4 5 6, 1 i 811 9 10 11 12 13 14 15 16 I7 18 19 24 21 22 23 24 25 ~1 • MR. BURRELL: Thank you, bir. Anderson. Questions? MR. GILBRETH: I have no questions. MR. Pd1ARSHALL: I have ony question, t~2r. Andersen. W?`v® heard considerable testimony about the opera ion of compressors, particularly relating to failure frorz various mechanical type f~.iluras. One I hadn't hewed was what I believed you implied when you said. that there was a pcssibili~y of com-- pressor dam?gs due to temperature changes on the startup of the compressors. Did I understand y^u correctly on this, and if so, what is the nature caf this damage? MR. B . C . ANDERSON : N~ ~~ T~?E°: problem I referred to is a problem connectyd with our tdordberg turbines. Those .are the 5000 hors power turbines ghat drive the 3500 Y.4{] generagors to providd the el~:ctric power far thfl entire opera:ion. Our compressors are driven by electric metors, a. 2000 horsepower com ressor and i `' s driven by ~n electric motor ,and :-then _ the:'_ auxi~liar P But the Nordberg tLrbi.ne, this machine which drives the generators, once it's shut doVm and cooled and starts back up, we have had maintenance problQ~s just due to she cooling of this machine. As long as you can keep it in operaticn, it seems to have a fair history of performance, but shutting it down, which is operating at a pretty high temperature, letting it coal and starting it bank up, we have had problems with the machine. I . _ MR . PARS HALL : Thank you . , 11 R & R COURT REPORTERS 823WEST EIGHTH AVENUE-SUITES 277-4713 ANCHORAGE,ALASKA ~950i , I• 1 • 2 3~I I 4~', 5I 6 i 7I i 8''~ 9 10 11 12 • 13 14 15 16 17 18 19 20 21 22 . 23 24 25 1 Page 45 MR. BURRELL: Mr. Anderson, did I understand you to say. that you've worked out a gas exchange or a gas sale or some purchs.se agreement with Union-t~sarathon for backup gas ', from the line along the --- on land there? ~, MR. B. C. ANDERSON: No. I said that we such are negotiating /an exchange. MR. BURRELL: Negotiating an exc~aange. ~1ou1 it b~ for both Platforms 'A' and Spark? MR. B. C. ANDERSON: Yes. These. systems are tied together so wherever there is a fuel need., well, any fuel we grt onshore can go to either one. MR. BURRELL: .Assuming your contract is --- negotiation is successful, you`d be .able +~o tap off that line and go to both platforms? MR. B. C. ANDERSON: That's correct. MR. BURRELL: Okay, thank you very much- . 1~ir. Anders©n. ~~Till you be available if there's any further questions? PdR. B . C . ANDERSON : Yes . MR. BURRELL: Thank you. MR.ANDERSON: Mr. Chairman, members of the. Committee, this .concludes the testimony for --- in regard to Trading Bay Field and Conservation Order No. 103 -regarding- / Trading Bay Northeast. AGain it z. demonstrated that the Monopod platform in the Tradin physically Bay Field will be /capable ofputt~;ng vur excess gas to shore. by R & R COURT REPORTERS • 625 WEST EIGHTH AVENUE-SUITE 4 - 277-4713 • ANCHORAGE, ALASKA 99501 • ~~ LJ I• r~ L...J 1 2 3 4~' 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 28 24 ~5 • ~' Page: 46 November 1 ,1972 extension date. ARCO Spark and 'A' platforms are a little different situation; they. comply except under emar- gency situations where the gas supply that they have acquired from Mobil and Union is interrupted; they can comply by the July l date. I think these facts point up the necessity of extending this Order until November 1, 1972. Thank yeu. MR. BURRELL:` Thank you, Mr. Anderson. A little bit of housekfleping her$. Let the record xeflect that we accepted these Trading Bay Northeast Exhibits One through i i Four which Mr. Anderson said he'd prepared or had prepared under' his supervision. MR. ANDERSON: At this point w~:'ll turn the hearing over to Ralph Crews :who will carry on for Conservation Order 102. MR. BURRELL: Thank. you. ~ MR. CREWS; Mr. Chairman,. our. witness will •be for AM000 Production Company Mr. Bart Giles who over the last sQveral years has testified before this Committee many times, and unless the. Committee desires otherwise, we ask that_.the testimony in regard to his qualifications bs waived at this time MR. BURRELLz. He's previously qualified. MR._CREWS: Mr. Giles. MR. GILES: Bart Giles, AMOCO, Denver, and at the outset I should. say that I will be testifying on Con- nervation File 102,-Granite Point, and also 105, r~iddlegraund R & R COURT REPORTERS B25 WEST EIG FiTH AVENUE-SUITE 5 277.4713 ANCHORAGE, ALASKA 99501 ~~ 1 it 2 II 3 4 5 s 8 9 10 11 12 `~ 13 14 15 16 • 17 18 19 20 21 22 23 24 25 '~° 1 • • Page. 47 Shoal, as to the Chakachatna Group's platforms. As to equipment for shipping the excess casingh~ad gas from thza~: platforms, the four platforms in the two fields, to shore, on Granite Point 'Bruce as well as on .Granite Point. Anna, we currently on each of these platforms have a Solar-Saturn 1100 horsepower turbine with seven stage centrifugal compressor and a Glycol dehydrator on these two platforms. This will"serve the dual --- each compressor will serve t~ia dual purpose as a fuel gws compressor and a gas to shore compressor. And there's no other equipment thaw will be required to put the gas onshore. ~~ow, at t~iiddleground Shoal3aker platform; wecurr~ntly h~vw a Worthington 1000 horsepower integr~.l reciprocating cm- i Q ~ :~1 w i l l pressor and a Glycol dehydrator for gas lift service. • use she last stage of this existing .gas lift compressor through contral valves to ship the excess c~singhsad gas to shore. We also have a Fuller centrifugal compressor-driven by a 150 horse- power electric motor for fuel gas service on Baker. At the .Dillon platform in South i~iiddleground Shoal wr currently do not have any compression facilities"_installed. We have on order a Gardner-Denver compressor with a 300 horsepower electric motor. .The unit is scheduled for delivery the first week of June and will be ready for startup by July 1st. Also we will have, installed a Glycol dehydration unit which is on order and will bQ installed and ready for startup by July 1st. The compressor will sYrve the dual purpose as a fuel gas compressor R & R COURT REPORTERS 623 WEST EIGHTH AVENUE-SUITE S 277-4713 ANCHORA6E,ALASKA 99501 1 • 2 3~~ i 4' 5 6~I' 7 8 9 10 11 12 13 14 15 16 17 18 19 20 I 21' 22 • 23 24 25 1 Page 48 and a gas to shore compressor. Nvw, as to the pip~linssfrom Granite Point, we hadbeen shipping excess casinghead gas from both Anna azd Bruce through the eight inch line from Brucz to Anna and the tin inch line from Anna to shore prior to a pipeline break. The break in the ten inch line from Anna to shore occurred on December 7, 1971, and the plans for repair-are that we are this month, this month of May, running a detailed bottom survey over a ten thous~:nd -foot span where the breaks have hsretofore occurred, and this on tiarathon's Exhibit Two is across the brawn and orange colored shifting dune area, to determine the extent of the brQGk this tim~* and the condition of the bottom., and we're using Raytheon`sI electronic equipment. Then in June, well. into th~€ summer months, we'll have to buy pips and material for repairing this ten inch. line, and we'll have to allow time for the barge t® make the repairs. The weight and the :amount of pipe and the method of making the repair quite naturally depends upon the results of .Raytheon's survey of bottom conditions, the tidal action of: thQ pipe --- on the pipe and the extent of the break. We plan to use a locally available crane Barge for the pipe2.ine repairs. W? will not try to tie into. Unicn's lay barge schedule for their twin-ten inch line across the Inlet. This is simply a matter of timing; it's better to use our own barge.. The ppe- line from Middlaground Shoal platforms to the East Foreland area these are shown again on P4arathon's Exhibit Two, these are aigh# R & R COURT REPORTERS 82S WEST EIGHTH AVENUE-SUITE 3 277-4713 ANCHORAGE.ALASKA 99501 r 5 6 7 8 '~ 9 10 11 12 13 I4 15 16 17 18 19 20 21 22 . • 23 24 25 t~ ~~ 1 • • Page 49 1 inch lines in all cases, and I might mmmntion some anticipat$d operating. pressures: from Baker to Sh-ell 'A' platform will be .operating in the 325 to 375 pound range; from Shell °A' to Shelf 'C' will be operating in the 300'to 350 psig range; from Shill `C' platform to Dillon in the 275 to 325 pound range; and from .Dillon to shore in the 250 to 3OO pound range so that the gas will arrive onshore at approximately 175 pounds. As to the .current status of these liners, all lines are intact- and ready to receive gas except for the lines, one line, betw¢en Baker and Shell 'A' platform. That line is currently plugged. with ice and we would anticipate it should be cl~arec~_aAdthawed the first part of June. As to the onshore facilities, we have--two.high.vertical scrubbers on order wi~~.h delivery scheduled latter half of iiay. one One scrubber will be used for Granite Point gas, thQ other/for Middleground Shoal gas. We anticipate the installation of these to be complete by July 1st. Mr. Church with Union adequa~ely and thoroughly covered the Collier Chemical setup and the lines is tha ten and three-quarter low prQssurs line that will be installed in timell fashion when the sixteen inch high pressure line will be installed. As to the ssqu~nce of events for buying material for gas. handling the excess easinghead gas, we signed the gas saps contract with Union on October 27, 1971, and we placed the order for the major equipment as follows:. the Dillon gas compressor on February 10, of this year; the Dillon dehydrators on the 22nd R.& R'COURT REPORTERS 825 WEST EIGHTH AVENUE-SU17E E 277-47 t3 ANCHORAGE, ALASKA 99501 I• 1 2 3 4 5 6 g 9 10 11 12 13 I' 14 ~15 16 17 18 19 • 20 21 22 23 24 25 a~ 1 of February, this year; and the cnshor~ scrubbers, February i0th of this ya~.r. ties of course could not design equipmEnt end obai quotations until a gas sales contract was obtained in order tb know what pr^ssures and so forth would be required. So in sum and substance, w~: ~: mad geared up .and progr:u^Zmad our aquipm~nt nyads so as to comply with your July 1, '72 no- flare order, and we would have bran ready warfl it nit for our need-to repair our Granite Point offshore pipeline this summer. So we, gentleman, too request a four months extension of both Orders 102 for Granite Point, 105 for P~iiddleground Shoal to November 1, '72 to permit Timely ccmnletion of all mechanical repairs and debugging of all new equipmdnt installations, and just timely dovetailing in with the entire complexity of he system, Union-Marathon system. That's all I have. MR. BURRELL: Thank you, Cdr. Giles. P4r. Gilbrrth, do-you have any qu®stions? MR. GILBRETH: Mr. Giles, as I'understsnd your testimony than, except for the break in the Granite Point line, you will have all of your equipment installed and ready to go by .approximately July 1st, is --- MR. GILES: That is correct, sir. MR. GILBBETH: --- that right? And do you have any feel for the repair date cn the Granite-Point link? ~~ MR. GILES: I would say by September we should be all repaired on that line. R & R COURT REPORTERS 013 WEST EIGHTH AVENUE-SUITES 277-4713 ANCHORAGE,ALASKA 99501 I~ L~ 1 2 3 4 5 6 7 8 9 10 11' 12 13 14 15 16 17 18 19 20 1 21 ', 22 • 23 24 • 25 1 Page 51 MR. GILBRETH: As I understand your testimon also, it was not necessary to put in additional equipment on eithAr Bruce, Anna, or Baker, but you .did hays to install addi- tional equipment on Dillon? MR. GILES: Basically .that's. correct. MR. GILBRETH: .Was this equipment ordered -after the Conservation Order was issued last year? P1R. GILES.: Oh, very definitely. MR. GILBRETH: That's all I have. MR. BURRELL: Mr. Marshall? AIR. MARSHALL : P1o questions . MR. BURRELL: With respect to that Dillon equipment, it-was ordered for the sole purposes of moving casing- h~ad gas to .shore in compliance with the Cons¢rv~tion Order? MR. GILES : I ~ was, sir. MR. BURRELL: Have you got any rough idea of the cost of }.hat equipment that was ordered? I MR. GILES: Yes. $260,000 for thQ gross cost tothe Chakachatna Groupfor this installation. MR. BURRELL: On Dillon? MR. GILES: No, this includes everything, TherQ was a littlQ bit of work on Baker because we're going to use thfl last stage of },.hQ existing gas-lift compressor to take that excess gas to .shore; but the whole summation of the requisiti®ns were about $260,000. R & R COURT REPORTERS 015 WEST EIGHTH AVENUE-SUITE 13 277.4713 ANCHORAGE,ALASKA 99501 1 2 3 4 5, 6' q~I 8 9 10 it 12 13 14, 15 ', 16 17 18 19 20 21 22 23 24 • 25 ~+~ 1 • Page 52 MR. BURRELL: Thank you. MR. GILBRETH: Excuse me. Let me verify ~ < did you say that you signed a contract with Union on .October 27 '71? ~e MR. GILES: That is correct. MR.::GILBRETH: All right, thank. you. MR. CREWS: Mr. Chairman, that completes AMOCO's testimony., and'~I believe Mr. Rudd will introduce his witness for Shell's portion of Order No. 105.. MR. BURRELL : Thank emu, Mr. Crews. Will. you ba available --- MR. GILES: Yes. MR. BURRELL: --- for questions. Thank you, • Nir. Giles. It looks as if we'll be able to wrap this i.p just after noon, another few minutes here, so we'll .just go ahead. I'm sorry you'll be late for lunch. - MR. RUDD: Mr. Chairman, I'm Joseph.. Rudd, appearing on behalf of Shell Oil Company. The testimony regardi Middleground Shoal Field for the SAS Group will be presented by A. 0. P. Cs.sparian, who is th¢ Division Mechanical Engin¢er.for Shell. He is qualified before this Committee at the hearing in Juneau in March of 1971, and lie testified aL the P~iay hearing last year also. MR. BURRELL: Thank .you. We'11 recognize his qualifications. R & R COURT REPORTERS - e2SWE8T E16HTH AVENUE-SUITES 277-4713 ANCHORAGE. ALASKA 99501 - ~ -~ Pag~ 53 1 MR. CASPARIAN: My name is Pater Casparian 2 with Shell Oil Company, Division.Mlachanical Engineer. Conner- 3 vation Order No. 105 was issued by the Alaska 0i1 & Gas Conner- 4 vz~tion Committee on June 30, 1971. 5 MR. GILBRETH: Pardon me, Mr. Casparian, 6 could you speak up a little louder; we're just .barely picking ? you.up.. 8 MR. CASPARIAN: Conservation Order No. 105, 9 issued by the Alaska Oil & Gas Consarvati~n Committee on June 10 30, 1971, prohibits the flaring or venting of casinghaad gas 11 from the r2iddl~ground Shoal Fuld after July 1, 1972, except 12 for the smount necessary for adsquate safety flare and timer- 13 genci.ss. Compliance with this Order has required an ~normcus 14 ~ .effort by Shall Oil Company as operator for _tha S~1S Group for 15 two reasons: one, a market for the casinghaad gas did not 16 exist at the time-the Order was issued; and two, our Platforms 17 'A' an& 'C' did nom have the necessary equipm®nt to transport 18 this excess casinghead gas to market. At this time rather khan 19 t® review with youagain our operations in the P~SGS Field.,. I woul 20 like to include the transcript of Shall°s testimony pras`nted to . 21 you May 25, 1971 as part of my presentation to you today. 22 MR. BURRELL: Without objection, that. will 23 be included as part of thQ record. 24 MR. CASPARIAN: It°s the intent of my testi- 25 mony today_•to-show how we have gong about finding a solution. ro R & R COURT REPORTERS 82S WEST EIGHTH AVENUfi-SUITE 5 277-4713 • ANCHORAGE.ALASKA 99501 ..1 Page 54 ~~ 1 the problem of complying with.Conservation Ord®r No. 105.. I'I1 2 present in detail the amount of work that has been done to date, 3 pointing 'out '~.he time during which each phase has been accomp- 4 lish?d and then present in detail the work -that: remains to be 5 done and our scheduling for this work.. 6 Early in June 1971, Shell Oil Company..receivQd various ? offers for the c3singhmad gas available from our operations in 8 the MGS Field. Each individual purchase offer that was r9ceived • a 9 required/substantial amount~~ of engineering evaluation since ::he 10 delivery pressure and quality requirements were different for it each offer. An engineering study had to be mad? for teach offer 12 to determine whether the gas would be comprQssed to final deliva 13 pressure on thQ platform or booster compr_ssors would. be instal- 14 led onshore. This typA of analysis is particularly time.-consumi ~15 since in each case the effect of -a: particular compressor instal- 16 l~.tion on play:form integrityhad to b? considered. The pipeline 1? gathering system in the B1GS Field is jointly owned by the SAS 18 and Chak Groups. I reviewQd the system with you in my testimony The 18 of March 4, 1971 down in Juneau./ point ownership of .this syst~r 20 nQcessitates that-both groups process~aheirgas..in__the:sane 21 manner. The gas is delivered to shore in-a joint ownership 22 pipelins; consequ?ntly each group must agreQ on a sales arrange- 23 ment which permits common handling of the gas. An Engineering 24 Committee was therefore formed on .August 31, 1971 which proce.~d~ 25 to evaluate all of thec$s purchase offers that had been receiver R & R COURT REPORTERS iS! WEBT EIGHTH AVENUE--SUITE 3 277-4713 - ANCHORAGE, ALASKA 99501 '~° 1 Page 55 ~ - 1 On SQptember 15, 1971 this EngineAring Committee made their 2 final recommendations. It was agreed that MGS gas would be and 3 d~liversd onshore at 175 psig~/that no facilities would br 4 installed for liquid recovery other *~han those required to the 5 recover liquids which had condensed .in thr pipeline frameplat- 6 form ~o shore.. Each company then proceeded to negotiate their q own sa1~s contract caith a dQlivery pressure of 175 psig. g Shell entered into a contract with Union Oil Company for ' g the sale of ':heir rSGS casinghead gas cn November 5, 1971. After ~, ~10 an agreement had been reached as to onshore dQlivery conditions, 11 work could begin towards the purchase and installation of tha 12 compression Qquipment required on Platforms 'A' and 'C' to com- . 13 press :he gas to shore. Here again majcr engineering effort 14 was required. Borh Platforms 'A' and 'C' have virtually no 15 spwce availably for inst~.lla',:ion of additional equipment. An lfi engineering study was mad® to determine what type of compressors 17 should be used, wish considQrations given to +.,h? fact that they. 18 would have to bQ installed on a cantilevered platform addition. 19 The conclusion was ruched that turbine drivencertifugal com- 20 pressors had to be used. After thm decision to use tubne drive 21 Q - centrifugal compressors was mad.., Shell Oil Company than pre 22 parQd specifica}ions to cover the purchases of the equipment and 23 soliciy'd competitive bids. The preliminary bids were. received 24 on .November 17, 1971. The bids weer evaluated and the equipment 25 msnufacturers selected. A final bid was then solicited from thi • R & R COURT REPORTERS " - 02! WEST EIGHTH AVENUE-SUITE 5 277-4713 ANCHORAGE,ALASKA 99501 l 1 2 3 4 I 5 S~ 7 8 9 10 11 12 13 j~ -14 15 16 17 1$ 19 20 21 22 24 25 • I 1 Pages 56 particular manufacturer which would become the basis of ~ pur- chas~ contract. This final bid was r¢ceived on i~1~.rch 3, 1971, and a purchas? ord4r was issu¢d for the compressor stations on i-larch 13 , 19 7 2 . These compressor stations will consist of a gas turbine prime mover, centrifugal compressor, and various peripheral equipment. This ty~~ of equipment is not ~:vs.ilable from stock ' and must be cus~om d®signed and manufactured which r~~q~aires long Irad timss. The manufacturer's originally quoted delivery times was 29 weeks from the data of the purch~s~ order. 6Je have negotiat:~d premium paymQnts with }..hem to reduce this lead time to 24 wseks. The compressor stations are scheduled to bs shippe from Huston on or about Auguste 25, 1972. Even though thy com- yet • pressor stations have been ordered, ccnsiderablo work/remains ', to bs done. .The cantilsverad tilatform additions must be d~~signe:d and fabric~t~d and then installed'on the platforms. After canti- 1Qvered platform additions are in place, the comprssor stations must th4n bQ installed on the platforms. The critical itQm in the schedule, of courses, is tho delivery of the compressor stations from the manufacturer. tiaith compressor delivery being ,in late August, the compressors will be-install®d by October 15, and with two weeks debugging, should be operational by November 1, 1972. Tha SAS investment for the design and installation of the required equipment to ship our excess casingh~ad gas. to shore R & R COURT REPORTERS OZSS WEST EIG NTH AVENUE-SUITE S 277-4713 ANCHORAGE.ALASKA 99801. • • • 1 2 3 4 5 6 7 8 9 10 11 12 ~~ 13 i4 . 15 16 i7 18 19 20 21 22 23 24 25 .Page 57 is over $1,000,000. In my testimony, I've tried. to point out the magnitude of the problem we've faced in complying with Conservation Order iJo. 105.. I'v2 tried to demonstrate that Shill Oil Company has made every reasonable effort to meet the July 1, 1972 deadline for comglyng_with Conservation Order No. 305. This deadline cannot be met due to the long lead time required for the design and manufacture o£ the compressor ` stations. Union 0i1 C~mgany has already testified that they will not be ready to receive 2•iGS casinghead gas until around November 1, 1972. We therefore respectfully request that the deadline for complying with Conservation Order No. 105 be extended until November 1, 1972. biR. BURRELL :. Thank you, Nir. Casparian. Air. Gilbreth, do you havA wny questions? MR. GILBRETH: Mr. Casparian, you mentioned entered that you had /a contract on November 5, '71 for the purchase cf the gas, and I bsliev~ that you stated that you finally made your award for the compressor bid on March 17, '72? MR. CASPARIAN: That is correct.. MR. GILBRETH: Could you enlighten us just°a little bit what was involved .between those .two time .frames? MR. CASPARIAN: Yes, sir. Thera was signifi- cant --- various options that had to be considered. One was the type of .compressor that had to be utilized; secondly, .the ~eff~ct the of that compressor on/platform integrity had to be considered ~,~ R & R COURT REPORTERS •2i! WEBT EIQNTH AYENUE-SUITE S 277-4713 ANCHORAGE,ALASKA 99301 ~. ~ Page 5 8 1 because we did not have an s ace on the latform as it stands Y P P 2 right now.. We did have to determine and decide and. determine h 3 e what the effects of the cantilevered addition would be on t 4 platform. The type of equipment that we finally. selected had. to S have a delivery pressure on the platform in excess of 300 pounds S ar actually 350 pounds was the design pressure. This is in exces q o f what the standard package, Solar-Saturn package, puts out; g it is on the order of 250, so we had to go with a turbine driven g compressor or centrifugal compressor of the York design or a . 10 York compressor itself was a York compressor, a centrifugal li compressor, which is not an .off the shelf type item and requires 12 additional delivery time. The --- this basically was the basic.. 13 reasons for the major time between the time we signed the contrac 14 and the time we issued the purchase order. We had other internal 15 problems. We had engineering problems which. we had to evaluate, 16 but this'was primarily what had to be done. 17 MR. GILBRETH: In other words, for each type 18 of compressor installation you'd just almost have to design it to lg fit the platform? 20 MR. CASPARIAN: Thai is correct. 21 MR. GILBRETH: Before you can really consider 22 MR. CASPARIAN: That`s .correct, sir. • 23 MR. GILBRETH: Your installation is to move 24 casinghead gas to shore, is that. right? 25 MR. CASPARIAN: Yes, sir. R & R COURT REPORTERS 626 WEBT E13 HTH AVENUE-BUTTE B 277-4713 ANCHORAGE,ALASKA 99501 1 it? ,~ Page 59 1 MR. GILBRETH : ilith *,.ha installation thGt 2 you now have underway; you will move all the casinghead gas to 3 shore except for ~..he safety -flare? 4 MR. CASPARIAN: That's correct. 5 MR. GILBRETH: That's all I have. 6 MR. BURRELL : r1r . riarshall? 7 MR. MARSHALL:. r1lr. Casps.rian, al ::his lima d g you havs'any can'~ilevered ex}ansions on your platforms .for g production processing aquipMgnt? 10 MR. CASPARIAN: Na, sir. 11 MR. BURRELL: That's all we have, thank you, ir. 12 Caspari~.n. You' 11 br available in c~:se we --- . 13 MR. CASPARIAN: Yrs, sir.. 14 MR. BURRELL: --- have additional questions? 15 riR. RUDD: That complelgs the testimony for 16 the SAS Group, Mr.Chairman. 17 MR. BURRELL: Thank you, tv1r. Rudd. ig MR. CRE~a7S: Mr. Chairman, prior. to adjourn-' 19 ment and begging your pGrdon, Ati000 dbes h?ve one other short 20 piece of evidence that they would like to introduce. 21 NIR . BURRELL ; Thank you , P4r . Crews . 22 MR. GILES: I'm sorry I didn't cover ~;_his 23 point before, but we'd like to supplement the record of the 24 previous hearings, particularly the one a year ago, with a spsci- 25 ~ fic well ~xampla of two instances in our biiddleground Shoal R & R COURT REPORTERH 02E WEST EIQHTH AYENUE-SUITES - 277-4713 APICNORAGE. ALASKA 99501 °' 1 1 2 3 4 5 6 7 ~8 9 10 I1 12 13' 14 ' 15 16 17 18 19 20 21 22 23 24 25 1 • 17-595 Well rdo. 7 in the BCD Zone where we had. production loss due to water damage from excessive shutin times. You will rcal that a year ago this question was raised as to whe+.-her we had ar~r examples,and belatedly today I should like to enter this APdUCO Exhibit rdo. One into the record to supplement that testimony.. We show that in mid-1970 when the gas lift compressor was down a twelve :days. we suffered /loss of some 200 barrels of oil per day in this particular zone of Well No. 7. And then. in-the middle of last year the compressor was down twenty-six days, and wA saw a loss in 600 barrels of oil per day that we nw2r could get back in this particular will, which we feel was due to extensive the shutin time when water did damage the forma}ion due to/extensive exposure. - MR. BURRELL: Ths.nk you, Mr. Giles. We'll accept this`for the record. MR. GILBRETH: rir. Giles., just looking at the water cut curve hQrz, whams would you say is the approximate percentage of water production there? ~~ MR. GILES: Well, back in --- MR. GILBRETH: Two or three per cent? MR. GILES: Oh, yes. Back in mid-1970 when wa had the first compressor down time of twelvE days, the water rate was in the range of twenty-five barrels a day; that's t~av bottom curve. Then last year when we were down for twenty-six days with compressor troubl®s, the water rate was on the order R & R COURT REPORTERS - 61S WfiBT EIGHTH AYENUE-SUITE S - 277-4713 ANCHORAGE,ALASKA.99501 I• i. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ~l • Page 6i of .250 barrels. of water per day; it did jockey quite ~ bit there, but it's in thsa particular area of the graph. MR. GILBRETH: This well then is making a considerable quantity of water? i MR. GILES: Yrs, it is. Now, we don't have illustration at Dillon because w~ haven't had any excessive down Lima in any of our wells. t7e've been down for pump changLs, but this is usually s.ccomplished within a twenty-four hour period. MR. GILBRETH: Thank you. MR. BURRELL: Thank you, Mr. Giles. Don't run away, I might ask you a couple of questions her®. MR. GILES: All right. PdR.BURRELL: Go ahead and sit down if you want. MR. GILES: No, that's all right. MR. BURRELL: This is B~k~r platform? MR. GILES: Baker platform. tdR. BURRELL: The whole platform was shut down,.. not just this one well? MR. GILES: That's correct. . th°Se biR. BURRELL: Do you have/charts on any other wells? MR. GILES:. No, this is the first line offsef to the line injection w?11 No. 12, so this was one wbll that se~mad to be flattening but in its decline curve, or in other R & R COURT REPORTERS SZS WEST EIGHTH AVENUE-SUITE 5 277.4713 ANCHORAGE.ALASKA 99501 ~~ • 1 2 3 4 5 6 7 8 9 10 '' 11 12 13 14 15 i6 17 18 i9 20 21 22 24 25 '~° Fage 62 words responding to some degree from the flood, and that's why its water cum is increased and it provides th¢ illustration we wanted to put into .the record. - MR. BURRELL: Yes, but I suggest that we could find some other-wells and draw somfl curves that perhaps weren't damaged, perhaps those that wPrvn't producing as much water, would:_th~t note. be truce? FZR. GILES: Yes, it could be .true. MR. BIIRRELL: Thank you. MR. GILBRETH: No more. MR. BURRELL: Thank you very much, rir. Giles. Does anybody en the Committe© have any other questions of any of the witnQsses who testified today? MR. GILBRETH: I'd like to ask one general question of Pdr. Andersen or some witness. I never did hear specifically, but I assume +..hat the ..testimony is such that all flared gas would be placed to beneficial uses except for the i safety flares by Novsi~nb?r-1st under your proposal, is that not right? AIR. ANDERSGN: That's correct., (Agreement from other unidentified voices.) MR. BURRELL: Let th® record show that there was agreement from all the witnesses who said anything. There was no disagre anent. Is yhQre anything Also from anybody? Is there anyb©dy in the audience who has any questions or statements R @c R COURT REPORTERS. ~2S WEST E16 HTH AVENUE-SUITE S 277-4713 ANCHORAGE,ALASKA 99501 is i. 1 2 3 4 5 6 ?I 8I I 9' 10 11 ~I 12 13 14 15 Is i7 18 19 20 21 22 23 24 25 • Page 63 they want to make of any of the witnesses at alI? AZay I have that letter, Tom? We have one letter we`ve received which I'll read into the record prior to adjournment. It's a letter from the Kenai Peninsula. Chapter of the Alaska Conservation .Society, dated hZay 5, 1972. It's addressed to the Division of Oil & Gas. Subject is request for delay on termination of Cook Inlet off- shore flaring.. This organization would oppose a delay in t8rmi- nation of offshore flaring for the following reasons: Number one, continued flaring provides obvious air pollution which can be seen from Kenai almost any day as a low lying cloud of black, (the evening of 4/23./7.2 it looked yellow-greenish), smoke over. the Inlet; number two, the flaring of the offshore casinghes.d gas is a waste of a resource; number. three, the additional lasting of th? resource should not be permitted to continue - lest it make the installation of another LTdG plant or other such type of gas reprocessing for trans-shipment lass economicall fusible. Does not the fact shat the prop®sed plant under con- sideration by Pacific Electric Service Company contradict the :,e,arlier statem¢nts regarding lack of feasibility for the us~.g~: of the~gas from the offshore platforms. Number four, even if i±: may b~e essential to Qxtend the deadline, this organization recora- mands that it be done on a month to month basis with a review required for continuing extensions of an additional month. Signed, James E. Fisher, President. P.S. The pipe coa±ing is not bring accomplished in Alaska for the project. Is Lhe lack R & R COURT REPORTERS !23 WEST EIG HTH AVENUE-SUITE S 277-4713. °~° 1 ANCHORAGE, ALASKA 99501 I i 1I 2 3 4 5 6 7 9 10 11 12 13 I, 14 15 16 17 i8 19 20 21 22 24 25 1 P~.g~ 64 of the sixty to mighty jcbs involvsd in the required pipe chafing considered by this Division in its dFliberations ovEr the d®lay in thg gas flaring tyrminaticn deadline? I havL nothing Qls`. Does anybody else have anything thsy want to say or add? If n®t, we'll adjourn. Thank you .vary .much. (END OF PROCEEDINGS) R & R COURT REPORTERS B2'J WEST EIGHTH AVENUE-SUITE 9 277-4713 ANCHORAGE, ALASKA 99501 TESTIMONY TO EXTEND THE DEADLIPIE OF THE NO F-LAKE PROVISION CON- • TAINED IN CONSERVATION ORDER. NOS. 10?,' 103, 104, AND 105 TO BE PRESENTED ;BEFORE THE ALASKA STATE OIL AND GAS CONSERVATION COM- MITTEE ON MAY 11, 1922 TESTIMONY TO BE PRESENTED BY C. L. ROBERTS My name is Claude. Roberts and I am the Anchorage Division Petroleum Engineer for Marathon Oil Company. In addition, I am co-chairman of the Mechanical Coordinating Subcommittee of a • P~Iarathon-Union joint task force established to design and install a Cook .Inlet gas gathering system. Tt is in this latter capacity that I testify today. My testimony will illustrate the tremendous effort required to study, plan, design, and install the facilities necessary to deliver gas produced on the west side of Cook Inlet to the market area on the east side. My first exhibit illustrates this gas gathering system and its orientation to the casingliead gas production from the McArthur River and Trading Bay. Fields. The exhibit further shaves the "market • area" at Nikiski and the location of the large dry gas reservoirs ~~iJQ~ ~~~ t~ 7`tiaNS~.~~ ~- • -_- ~ in the Coo}: Inlet. Basin.' The gas gathering system consists of the hiqud Extraction Unit ,at West Foreland, the large compressor facility, a 16" pipelne_to Granite Point, dua1.10° submarir_e lines to East Foreland,.. and finally a IE" pipeline into the Nkisk area. The status of each of these. phases will be discussed thoroughly. Orders-were. issued for the various oil fields in Cook Inlet by the Alaska Oil and Gas Conservation Committee.-effective July 1, 1971. The. Conservation Committee ordered.: (1) casinghead gas in excess of. the maximum amount that..can be benefciallyutilzed. • may be flared until 7 AM, ADST, July 1, 1972; (2) effective at 7 AM, ADST, July 1, 1972, the flaring of any casinghead gas from the. McArthur River Field (and all other Cook Inlet fields.) is prohibited except for the amount necessary for adequate safety .flares and except in emergencies; and (3) the commencement, nature, and termination of all emergencies requiring flaring of casinghead gas. in excess of the amount required for safety flares shall be reported to the Committee within 96 hours after occurrence. • t~'e had previously studied various p ans to further beneficially utilize the excess casinghead gas in connection with. several hearings -3- extending from 1968 through May, 1971. .After issuance of these orders, Marathon, and I'm_sure other corapanies as well, .immediately reviewed these plans and initiated studies and investigations necessary to .evaluate"all available alternatives 'to comply with the no flare order in the relatively short geriod of time allowed for compliance. Market potential"and financial arrangements, both of wfich .can. be handled only on a separate company-by-company basis, were necessary prerequisites. Conversely, the physcal_and mechanical • aspects dictated a joint effort for consideration of a gas gathering system:. Therefore, on July 12, 1971, top-level management of Marathon and Union met in Los Angeles to consider the problem. The result of this meeting was the establishment of a joint Marathon- Union. task force to evaluate all problems and alternatives connected with such a project. Plans for formal organization witYi appro- priate assignments were immediately initiated. Marathon and Union. once again reviewed the various alternatives . for disposition of the. relatively small casinghead gas. reserve • ~~}_ • including: (1) storage of the gas by injecting into known onshore. structures adjacent to the Trading Bay Production Facility; (2) return of the casinghead gas to the reservoirs from which it was produced; (3) storage: of 'the gas in the Grayling gas sands of the McArthur River Field; and (4) delivery of the gas to the market area on the east side of Cook Inlet, thus displacing gas already supplying 'these markets. It was again concluded that delivery of the gas to markets on the east side offered the only acceptable disposition of the gas and this was practical only if the gas gathering .system could be utilized for future transportation of`a'substantal gas reserve. Gentlemen, the only reason we were. able to consider building a pipeline system to the east side was because of this dry gas reserve.. in the McArthur River Field. Although the xevew of the various alternatives of disposition were concluded quickly, several months of planning and design were necessary: to identify andevaluate the many problems. of building a pipeline system across Cook Inlet to the east side. • _5_ ..Recognizing-the need for current and accurate gas production data, material balances for. each of the three Trading Bay Unit i platforms, the Monopod Platform, the Trading Bay Producton'Facl- ity, and'the'Liquid.Extraction Unit were-made. A review of the gas production forecast for Trading Bay Unit and, Trading Bay Field was commenced in order. to evaluate platform compression require- menu. All platform and onshore facility schematic drawings, tracing the path of the crude and gas. streams. were updated. Plans were made for acquiring analyses of the various.-crude and gas streams in order to determine. the amount of processing required to make the gas deliverable. On July 21, 1971, we contacted Earl & Wright, Engineering consultants, to discuss methods. of determining the best possible pipeline routes across the Inlet. On July 22, F. M. Lindsey & Associates ,were asked to furnish a proposal to perform sub-surface reconnaissance work in Cook • Inlet.: The purpose of this work caas to better define the submarine • _6_ trench which exi ting-bathymetric maps, indicated°ran north-south immediately east of the ;McArthur River and :Trading: Bay Fields platforms. It was not 'known whether-or not the trench was contin- uous. At the same time,. plans were being formulated to determine the .feasibility of expanding and/or mod ifying the. Liquid Extraction plant. The original plant Baas designed to process 32 million cubic feet per day of casinghead gas an d 5.million cubic feet per day of crude flash vapors. Preliminary production forecasts indi- catedthe gas volume would exceed this amount requiring expansion of these facilities. It was evident th at some. additional plant processing would be required in order to make the gas deliverable even though additional processing for liquid recovery was unecon- omical. On July. 27 and 28, our process engineers met with Fluor Cor- poration in Houston-to outline various plans for modification of the plant. Fluor was requested to furnish a cost estimate for. making a feasibility .study for enlarging the plant and for optimizing • _?.. • the amount of compressor horsepower that would. be required to deliver plant residue-gas to a pipeline system. Also, on July 27, we prepared a tabulation of anticipated compressor horsepower. requirements, assuming different pressures for gas disposition on the east side. This information was mailed to various compressor .manufacturers and suppliers requesting. their. proposal for furnish- ing the necessary horsepower on either a purchase or rental: basis. On August 2, the Marathon-Union. Task Force .began detailed studies to solve the`many problems involved in designing.and con- structing a pipeline from West Foreland across Cook Inlet to the Nikisk area. In order to proceed as rapidly as .possible, the overall project was broken into two major segments, the West Side onshore facilities to be under the .direction of P~Iarathon Oil Com- pany, and the marine and East Side facilities under the direction of Union 0i1 Company. During the period from July 27 through'August 2, 1971, crude and .gas. samples were obtained from the platforms in the Trading B P Bay Unit and the Trading. Bay Field as well as the Trading ay ro- duc ion Facilities. In that the samples were necessarily shipped -8- by truck to Core Laboratories in Dallas, Texas, for analysis, data from these samples ~~ere not available for plant expansion design.. until early September. Marathon and .Union proceeded_with the general reconnaissance survey by Lindsey & Associates of the trench; area as shown in Exhibit 2 in an effort to .find the shortest route to the east side. If a direct route. was feasible, it was evident hat much time, material, and :money could. be saved. The results of the survey showed that in the trench area, immediately east of the McArthur River platforms, water depths were .from 240 feet to 400 feet. On August 6, we met with Earl & Wright to explore the feas- bility of a pipe lay truss (stinger) design necessary to operate in water depths of 300 feet. and greater in Cook Inlet. Also on this .date, we received some preliminary information from J. Ray McDermott and Brown & Root, Inc., concerning deep water pipelining in Cook Inlet. On August 13, Union conferred with Dames & rioore, Earth Science Consultants, outlining. the conditions of the various possible .routes.. • i •-9- of the marine line. we also received additional information from Hood Corporation :concerning problems of _laying ppeines`in Cook Inlet.. Gentlemen, at this time,. about mid-August, 'you can see that we had only scratched the surface of obtaining the necessary data to evaluate the various .pipeline routes across Cook Inlet.` Our preliminary discussions with the :various pipeline consultants and contractors-were for .the purpose of updating ourselves on the "s ate of the art" of .laying pipelines in deep water to ascertain if any of the newer techniques could be applied in Coak Inlet. Although these discussions were encouraging in that perhaps a deep water crossing could be made, more information was urgently :needed. This additional information .had to be obtained quickly, because if the only feasible marine route was to the north opposite Granite Point, a land line approximately 26 miles long had to `be installed from West Foreland during the coming winter. A pipeline across the.. McArthur River flats route can only be installed during freeze.-up. Such a line would have to be designed, pipe. and materials ordered, • -10- i and contras or mobilized, all in advance `of freeze-up, expected as early as December 1. Only a little over.. two. months remained for all of this activity to takeplaee. Although preliminary- studies were being: made on the Liquid Extraction Unit and'Compressor Station, final compressor. design criteria could not be es ablished until the route and the "market" were established. On August 23, 24, and 26, Union and Marathon personnel met with J. Ray rlcDermott and Brown & Root respectively to discuss possible construction methods of a "deep .water" marine pipeline. As a result of those meetings, it was decided that it was not feasible to lay pipe across Cook Inlet with conventional pipeline methods in water deeper than 180 feet. We further felt that we could not risk trying. some of the new developments of deep water pipelining in Cook Inlet, but would have to utilize the more conventional methods in order to minimize risks of installa~on and operation. We had previously made studies of the feasibility of using existing onshore and offshore lines in the upper Cook Inlet. It was decided that these lines could not be utilized and that it -ll- • would be necessary to ..construct a west side pipeline from'the Trading Bay ..Production Facility at West Foreland to Granite Point and a dual submarine line from Granite Point to East ::Foreland. A detailed two-phase survey along the proposed northern marine route, as illustrated on .Exhibit 2, was commenced immediately by Dames & Moore. The urpose of the study was to determine geologic P and oceanographic conditions along alternate routes which might inf uence the location, design, and installation af..theproposed. • marine pipeline. To accomplish these objectives., geophysical profiles, bottom samples, and current. measurements were obtained at several locations between Granite Point and ...East.. Foreland. Specifically, the scope of work included: (1) a review'of pub- lished and other available literature pertaining to the bottom conditions and oceanographic framework of .the area. These included several previous studies conducted in Cook Inlet related to con- struction of offshore platforms and. pipelines; (2) geophysical profiling along selected traverses using. a high-resolution boomer • system and sidescan sonar; -12- (3)_measurements of current speed and direction at various depths at nine different stations during periods of flood and ebb tide; (4) sampling of surfical bottom soils at selected localities by means of clam-she1T bucket; (5) a determinator. of-maximum current velocities which might occur along the proposed route based on oceanographic .data collected during the survey; (6) an engineering evaluation of soil conditions and current regime as related:.to pipeline design and construction.. 'Information from this marine survey indicated a mobile bottom condition in the area between Granite Point and the northern part of Middle Ground Shoals. We refer to this mobile. bottom area as the. "dune area" because of the shifting nature of the gravel bed .and sand occurring rapidly between tides. In order to provide a sound foundation and therefore a stable pipeline system, we needed to know the bottom conditions and the extent of the dune areas. All the above information would be gathered and furnished to Earl & ~~dright, who had been given the contract to perform an engi- • neering study required to design the submarine gas pipeline. -13- i Dames & Moore:.performed the offshore pipeline route suruey between September 8 and September 26. Profiles of the bottom and sub-bottom were obtainedalong four-different corridors between Granite Point and the East Foreland area. Additional profiles were obtained in the. northern portion in order to further define the duned area. On September 2, 1971, immediately .after the decision to lay the pipeline north to Granite Point, Fluor Corporation was author- • ized to proceed with the proposed Liquid Extraction Unit feasibility study to determine the optimum method of modification and estimated cost. The Liquid Extraction Unit utilizes a turbo-expander to develop the refrigeration necessary to recover the maximum amount of-butanes and heavier hydrocarbon liquids. .This refrigeration scheme leaves the residue gas at low pressure, approximately. 70 PSIG. Since the residue gas has to be delivered into a pipeline system. at relatively high pressure, the question arose as to c~hether or not the turbo-expander provided the optimum method of obtaining the required refrigeration. It caas Fluor's assignment to evaluate -14- - alternative methods of obtaining the refrigeration and thus optm- ze the amount of horsepower required for compression. The modi- fied`plant would also have to operate at a higher pressure if it was to handle the anticipated. increased. volume of gas. The pressure level as well as the method of refrigeration greatly affects the amount and type of horsepower required. By September 7, Marathon and Union had completed a pipeline • optimization study., only 12 days after the decision. was made to go north to Granite Point for a Cook Inlet crossing to East Fore- land. The optimization study considered various sizes.-of onshore and .submarine lines to carry various volumes of gas. at pressures of 700 to 1200 PSIG. This study resulted in-the decision to install 16-inch onshore lines and dual 10-3/4 inch submarine .lines. • -15- On September 13, ~4arathon began preparing the specifications fQr the West Side line. It was necessary that these .specifications include instructions for construction of a safe system, protection of the environment, and to ensure a satisfactory"completion date. On September 24, Marathon placed an order for 2? miles of 16 inch, .344 wall thickness, Grade 5LX-52 ERW line pipe for the west side portion of the gas .gathering system.. From September 30 through October 20, Dames & Moore and F. M. i I °~ Lindsey conducted a terrain survey and a soil investigation for the proposed 16--inch west side pipeline. The purposes of this work were to provide data for pipeline routing, design for weighting and anchoring the pipe, and to provide plan and profile drawings for construction. Specifically, the scope of work included: (1) a review of the. published literature pertaining to soil condi- tions of the route corridor; (2) a photo-geologic appraisal of the proposed and alternative pipeline routes; (3) a shallow sub- surface investigation including hand-augered baring and drillings and sampling with helicopter transportable rotary wash drill rig; (4) laboratory esting of soil samples; and (5) analysis of back- fill. and buoyance problems, frost pease ration, studies of anchor designs, and..a general review of construction problems. Following analyses of these .data, specifications fvr`the construction of the line. were mailed to prospective bidders on October 26, 1971. A major .consideration. was the .anchoring system necessary to over- come the negative buoyancy of a large diameter pipeline carrying natural. gas through terrain such as the mud flats of the McArthur Rivera Three types of anchors were utilized: (1) screw-in auger type were used wYiere the terrain, was not too rocky or swampy. These were i• spaced approximately'.50 feet apart; (2) concrete sadle weights weigh- ng 4,000 pounds each and spaced about 25 feet apart were used. where the auger anchors could not be used; and (3) concrete-bolt-on weights weighing 2,300 pounds each. were installed at 13-foot intervals at water crossings.- All together, about 2,5D0 of these three types of anchors were used in the 26.2 miles of line. These had to be designed, manufactured, and delivered before freeze-up. .The last barge load ~' -17- ~~ • of concr t w w ~ e e eight as offloaded at ~eest Foreland. on November 24, .The Land and Legal Subcommittee was preparing the .many appl- cations necessary to obtain aright-of-way. On October 5', 1971, application was filed with the U. S. Department of Interior, Bureau of Indian Affairs, to construct a pipeline across the Moquawkie Indian Reservation. On October. 7, application was made to the Department of Army, Alaska .District-Corps of Engineers,- for. a permit to construct a pipeline across several rivers along. the route from F~Test Foreland to .Granite Point. On November 1, application for aright-of-way construction permit was delivered to the State of Alaska, Division of Lands. Data from the Dames & Moore terrain study and the Lindsey survey were a necessary part of these appli- cations, thus precluding the. filing of these applications any earlier. Our process .engineers received Fluor `s feasibility study for the Liquid Extraction Unit modifications on October 4. Critical to our design was the final disposition of the. gas om the east side of the Inlet. Two markets with sufficient capacity • .a • to handle the total expected volumed exi ted. The Collier Chemical complex could utilize the gas at approximately 650 PSIG, but the gas would have to be further processed.. Swanson River Field pres- sure maintenance. project could take. the gas without further proces- sing, but the pressure would need to be maintained at 1050 PSIG. In July, 1971, .Union initiated feasibility studies for an east side plant to process the gas for removal of the propane and heavier hydrocarbon components to provide suitable gas feedstock to the- Collier Chemical. Plant.-Five engineering and construction companies were consulted and proposals for processing, storage, and other facilities required to produce and make disposition of liquefied hydrocarbons were developed. Simultaneously,. surveys and studies were undertaken to develop markets for the products that would be produced.. Engineering consultants and Union Oil Company had to determine not only a suitable processing design, .but availability of equp- ment, materials, construction manpower,. suitable sites for facili- ties and numerous other factors critical to design and timing.. In` t -19- • addition to locating product consumers, marketing research also .required development of many other factors such as production ~ forecasts, type and quantity of products, type and size of storage _I { i tanks., transportation and loading facilities, etc. By,Novembe.r 23, 1971, it was determined that a plant on the east side. was not feasible and plans for the plant. were. abandoned. This. left Swanson River-Field as 'the. only market capable: of taking_ all the gas expected from the Trading Bay. Production. Facility Com- • pressor .Station. In the meantime, D4arathon was proceeding caith preparation `of compressor inquiries to obtain..quotations for equipment to meet pressure conditions of both possible gas markets..- On October 27, specifications ~•~ere mailed to three manufacturers of compressor equipment. I would like to digress just for a moment to better explain. the need for the considerable front-end engineering required to design the large compressor facility. • _,a_ ~ Normal compressor design parameters include gas rate predictions, temperatures, suctionz and discharge pressures. This installation was further complicated by rapidly declining gas rates,•variable gas compositions, and variable operating conditions. It will be necessary for. this compressor facility to perform under a wide range of operating conditions including the LEX running and not running, one. submarine line inoperative, one machine down for maintenance, etc. These are the types of variables that. must be analyzed prior • to finalizing a design, purchase, and installation of a 7200 horse- power compressor station. It was these factors that lead us, ..last year at the May hearing, to advise that a minimum of 18 months would be required to complete such a project. To have been prepared to go to bia on a compressor station of this size and complexity within a period of four months was indeed an accomplishment, By Tlovember 1, the west side pipe and materials were on order, bids were out to pipeline contractors and compressor manufacturers. To be safe, only. four weeks were left to mobilize on the west side • -,~_ ~ o£_the Inlet and to receive and unloadtl~e 27 miles of 16-inch i PPe• On November 3, all-l6-inch. pipe and coating.-materials left Seattle by barge. On .November 9, bids were received from 'three contractors for the construction of the l6-inch west-side ;pipeline. On November 12, the construction contract was awarded to Locher Company. On November 13, the bargee:-carrying the '16-inch pipe arrived at West Foreland. and was beached for unloading operations. On November 22, we completed ,the offloading and storing of the pipe • at a storage site adjacent to the Trading Bay Production .Facility. On November 30, a plant engineering subcorimittee representing the plant owners reviewed the Liquid Extraction Unit modifications and compressor requirements. A recommendation to purchase three Cooper- Bessemer 2900 horsepower compressor un%ts was made and purchase orders were issued on December 2, 1971.. On December 1, the State of~Alaska, Division of Lands, granted a permit for the construction of right-of-way across state lands • from West Foreland to Granite Point.. On December G, a crew from • -22- • F. M. Lindsey & Associates began the construction survey for the ...pipeline route. On December 13, 'the U. S. Department of Interior, Bureau..of Indian Affairs, granted an easement for the construction of the pipeline rightrof-way across the Moquawke Indian Reserva- tion. On that date, Loeher completed the barging of their equip- meat to West Foreland and. began. the construction of their pipeline camp. Most of the construction material had been transported to the staging area before the ice conditions in-Cook Inlet shut down • barge traffic. However, 650 sets of screw-in anchors .and. all the pipeline valves and fittings had to be transported to the job site by air. On December 22, the Department of the Army, Corps of Engi- neers, issued a permit for crossing the. four major rivers between West Foreland and Granite Point. We were mobilized and all_the permits necessary for beginning construction of the West Side pipe- line had been received. Locher Company commenced right-of-way clearing operations on December 18, but unfavorable weather conditions caused consi- derable problems resulting in some delay of the construction • -23- schedule. However, through a diligent effort, the contractor com- pleted thee: construction effort on PZarch 22 following a successful hydrostatic test of the pipe inc. All that remaned'was he env- ronmental restoration of the right-of-way. Fertilizing. and reseed- ng operations along .various areas of .the right-of-way were completed on Agril 4. While Marathon was occupied in mobilizing materials :and. the contractor on the west side, Union Qil Company was busy analyzing the. mass of data acquired in the detailed. marine survey. .Earl & Wright were commissioned on September 5 to develop design criteria for gas pipelines crossing Cook -Inlet from Granite Point to East Foreland. The Dames & Nioore study furnished informa- ton of tha water current velocities and directions and the bottom soil conditions .along the pipeline route. Earl & tti~right used this information to study the design requirements for twin 10-inch-and twin 12-inch lines, taking into account static stability, dynamic stability, pipe metallurgy, corrosion protection, stabilization • methods, installation problems and procedures, and relative costs. _. . -24- As indicated on Exhibit 2, the route would proceed in a direc- ton perpendicular to the shore dinefor:.a distance of 8,800 feet. from Granite Point to a location northeast of the northernmost Amoco platform in the Granite Point .Field. It then proceeds fora dis- tance of approximately 30,000 feet to a. point northeast of ~~tiddle Ground Shoals and thence fora distance of 71,700 feet o a-point on the East Foreland, in .the vicinity of Nikishka #2. On both sides ~~ of the P•'tiddle Ground Shoals area, the water depths are about 150" feet. at mean low, low water, while at the Shoal crossing, the: water depth is only about 70 feet.. Bottom conditions along the route vary from gravel, cobbles, and boulders in the vicinity of Granite Point to large stretches of sand and gravel between r~4iddle Ground Shoals and the East Foreland. Conventional pipe laying methods for deep water and strong currents such as experienced in the Coek Inle call for a lay truss supported both at the lay barge and on the bottom, as illustrated on Exhibit 3. The pipe lay truss acts as a cradle for the pipelines as they are being laid. 4'+ithout support from both the surface and • _„_ • • the bottom,. the lay truss would simply be swept away in the strong - currents of Cook :Inlet. The lay truss must be of sufficient length to provide for a safe pipe laying configuration consisting of overbend and sag-bend .which stresses the pipe to no :more than 80 percent of minimum yield. The total length of the lay cuss designed for this pipe laying operation is"about '340. feet long and weighs approximately 300 tons. An underwater pipeline is much different-from a pipeline on land, since it must have sufficient weight. for static stability, must avoid resonance caused by Long unsupported spans, and must have sufficient strength to avoid buckling or overstressing during the pipe laying operation. A pipeline across Cook Inlet is differ- ent from the usual underwater line because of the bottom soil con- ditions and current velocities which are very high and persist at bottom depth. When bottom irregularities or scouring result in excessive .span lengths and flutter of the unsupported lines, or when high current velocities result in horizontal movement of the lines, it is necessary -26- to provide additional support and anchoring. Aline on the bottom of Cook.Inlet. is subjected to both a rift force and adrag-force which vary with the `square of the current velocity. The .lift force is counteracted by the weight. of the line, its contents, ardany-weight-coating provided, while the drag force is resisted by friction betcreen the~.ppe and the bottom soils. Protection against corrosion is another. important design para- meter and cathodic protection in Cook Lnlet presents some unusual problems. Corrosiveness is about eight times as high in Cook Inlet as it is for normal sea water. The swift currents, high dis- solved oxygen, and abrasion by suspended solids, accelerate corro- sign rates. Two basic cathodic protection systems were analyzed. One - impressed current, and two - sacrificial anodes (zinc bracelets). Armed with the mass of data supplied by Dames & Moore and the study by Earl & Wright, Union and rlarathon personnel held engi- • neering conferences with Brown & Root, Inc., and J. Ray .•icDermott, -27- • Inc., in Houston and New Orleans during the week of November 30 - December 5, 1971... These meetings resulted-in the finalization of `" the marine pipeline system. The line consists of .dual 10-3/4 inch OD, .594 wall thickness, grade SLX52 seamless line pipe. Concrete weight coating will be applied, using one, two, and three 1/2-inch thicknesses of 190 pound percubicfoot concrete. The pipe lay truss was designed to withstandtwo times the force exerted on it,by the weight of the pipelines when filled with sea water, and the force exerted by thee. sea water flowing perpendicular to the lay russ at a velocity of 7.1 knots. It was further stipulated that the truss would not be permanently deformed by bending in a storm current of 8.4 knots. The truss was designed and is being built so that the pipe would not be stressed to more than 80 percent of the minimum yield from the time it leaves the lay barge until it is landed on the sea floor.. On December 2, Union Oil Company issued a purchase order for 246,000 feet of 10-3/4 inch seamless line pipe.. The pipe will be • -28- coated with acold-tar corrosion coat andc•~ith a sufficient thick- ness of the 190 pound per cubic. foot: steel reinforced concrete _ weight coating necessary to provide bottom; stability. Zine anode bracelets will be installed every 340 feet for corrosion protection. an December 23, a preliminary draft of the general project " construction specifications was mailed to McDermott and Brown: Roat. -The final. drafts were mailed on January. l7, 1972,. and the bid due date was established as January 31. Concurrently to the preparation of th8 specifications for installing the submarine lines, bid specifications were prepared for the continuous posi- tinning service necessary to guide the lay barge on its proper course, the radiographic inspection of the welds,. helicopter service, dock and .stevedore service. All business arrangements had been completed for the installation of the' corrosion wrap, cathodic protection bracelets, and weight coating of the 10-3/4".pipe prior to its transportation to Cook Inlet. Negotiations were commenced with the various tug and barge companies concerning the transporta- • Lion of the pipe to Cook Inlet. -29- • Referring back to Exhibit 1, you will note that the proposed routing of the `East Side pipeline from the beach approach to the Swanson River Field line tie-in will follow a general southerly direction to the Swanson River line junction and:.beyondto the Collier plant. To comply with therdatural Gas Pipeline Safety Act requirements, this pipeline will be designed for Class III construction utilizing 16" OD, .344 wall thickness, Grade SLX52, ERW, steel pipe. Approx- mately 28,500 feet of pipe will be required between the shore .approach and the Collier plant tie-in. It is planned to ship this 16"pipe from Vancouver, Washington, along. with the 10-3/4" pipe for the dual submarine line. Union Oil .and I~larathon decided to install a liquid hydrocarbon: recovery system to collect any liquid hydrocarbons that may accu- mulate in the line. It is possible that at the operating condi- tions of the pipeline system, a retrograde condensation problem may exist. Also, in the event of an LEX plant upset,. it is possible that liquid hydrocarbons can. enter the: pipeline system, For these • -30- reasons, it was felt mandatory that an extensive liquid recovery .....system be designed. While the engineers were designing the submarine line. and'. the East Side facility, our lawyers and land men were preparing the necessary.. applications to secure all the required..pErmts far the construction of these facilities. Applications for permits to construct the marine lire were mailed out early in January. and negotiations for the right-of-way acquisition at East Foreland • commenced shortly thereafter. Please refer to Exhibit 4, illustrating the engineering and construction schedule for the dual. submarine portion of the project. The vertical axis is the. percent of project days from July 1, 1971, to completion. The horizontal axis shows the actualtime frame in months. Note that 40 percent of project time was required to obtain the final design criteria. On January 31, bid proposals for installing the dual submarine lines were. received from Brown & Root and J. Ray McDermott... Because • of the substantial cost involved .with this portion of the project, -31- an extensive evaluation of each of the contractor's bids was re- quired By mid-February, J. Ray ricDermott Co. was selected as the contractor. to install the submarine pipeline and mobilination of the pipelaying spread commenced immediately. The 3ogstics required to mok~ilize a complete pipelaying spread with the necessary. auxiliary support systems and personnel are tremendous. The.-lay barge: had to go into drydock for extensive: refitting and revamping in order to perform work in Cook Inlet. Heavier anchors and wires had to be ir_stalled: A large gimbel- type hitch., .required to hold the pipelaying truss, had to be fabricated and connected to the lay barge. Tugs, pipe barges, crew living quarters, had to be negotiated. for and mobilized. This equipment is only found on the Gulf Coast and along the West Coast. It is no small task to solve. the logistics of mobilizing such an operation.. You will note that it was mid-December before the final design of the marine pipeline system was completed; now, 9Q days later, men, equipment, and materials began their journey.. to Cook Inlet. -32- McDermott's lay barge departed Harvey, Louisiana, on April 8. It will require approximately-60 days for. its trip to Cook Inlet with its scheduled arrival sometime during the. first week-of June. It will require about seven days to unload the barge at Kenai and. to connect he lay truss which is being. fabricated in Anchorage (.fabrication of the truss commenced. on April 15). h'e expect to have. the lay. barge on the right-of-way at Granite Point by June 14. About 50 days will be required- to lay pipe across Cook Inlet, and we plan to hydrostatically test the system by mid-August, 1972. • A schedule for the construction of the East.Sidepipeline and liduid handling facility has been prepared, and is illustrated as Exhibit 5. Final engineering design was completed and specifi- cations for construction went out to bid_on March 28. Mood Con- struction Company of Whittier, California, was awarded the bid on April 24. The installation of the line should commence shortly after the pipe's arrival at Nikiski between riay 15 .and .June 1. It should take approximately 45 days to complete construction of the pipelines. • -33- Bids on the equipment for the liquid handling facilities were received 'on May 1; equipment was ordered May,4;--and delivery is estimated around August 1. Completion date for the east side liquid handling facility is scheduled for October 1, with start- up estimated by October 15. Exhibit 6 shows the schedule for the compressor station and modifications to the Liquid Extraction plant at west Foreland. As mentioned earlier, the three large compressors were placed on order in early December, 1971.. This provided for the necessary shop space while all the design parameters were being finalized. Marathon personnel met with CE/Southern on January 26 to finalize these parameters. I will describe some of the equipment to indicate the-order of magnitude of facilities comprising the 7200 horsepower compressor plant. There will be three 2400 horsepower units. Each unit will consist of an engine skid, two piping skids, one gas cooler skid, one lube oil module skid, and one utility cooler skid. The total • station will therefore be comprised~of 18 large skids. The esti- mated weight of this equipment is over 1,200,.000 pounds and will • -,<_ • • require 21 rail cars for transportation from Houston to Anchorage. This entire compressor- station will be housed in a building 46 feet wide by 150 feet long with. an eave height of 27 feet. Thee design functions of :the expandedcompressor station are to compress approximately 48 million cubic feet of gas per day received from the McArthur River and Trading Bay Fields platforms from 150`PSIG to about 425 PSTG. Approximately 6-1/2 million cubic feet per day of crude flash vapors will be compressed from 10 PSIG _ to 525 PSIG. This portion of the compressor station is referred to as the boosting service and delivers gas to the Liquid Extraction Unit. The remainder of the horsepower will be used for transporta- tion and will compress approximately 45 million cubic feet per day of LEX residue gas from. 150 PSIG up to 1200 PSIG, which is the pressure necessary to enter the pipeline facility. Fluor Corporation was selected as contractor for the installa- tion of the compressor units, designed and fabricated by CB/Southern. As prime contractor, Fluor will also make the. modifications to the Liquid Extraction Unit. On February 23 and 24, Fluor came to -35- Anchorage to discuss the final process and mechanical flow of the plant modifications and-the compressor installation. A construe- tion agreement was executed on March 22. Fluor `s 'construction superintendent moved to Anchorage on April 10 and .commenced mobli- nation of the subcontractors necessary to excavate"and prepare foundations for the large compressor skids and"to do thenstalla- tion work. These contractors are mobilized and are waiting for the ice to leave .the Inlet so that they can barge their equipment ~ to the construction site. One of the large compressor units should arrive: in Anchorage the first of June. The second and third units will arrive in Anchorage around June 21. These units will be barged from Anchorage to the Trading IIay Production Facility, unloaded, skidded into position, and set on their foundations. The final engine should be in place by July 15. Once the units are in place, a critical phase of the construe.- tion effort has passed. However, considerable work remains to be • done prior to completion estimated by October 1, 1972. In order . ~ ~ , -36- to allow for contingenciesand provide sufficient time to .de-bug the. system, we anticipate final start-up about November 1. This is twa months ahead of the time .frame which. w8 testified to in a previous hearing. I would like to assure you that every:. effort has been made and. will continue to be made to place this pipeline system, com- pressor station, and plant facilities into operation. at the very earliest date. Hopefully, I have been able to illustrate the . magnitude of the project and to emphasize the tremendous amour_t of front-end designing ar_d engineering required for such a massive project. Since the. most costly portion of this project still remains to be completed, a final cost is not known at this time; however, when this project has been completed, the cost as presently estimated will be in excess of 25 million dollars.. Finally, L hope I have shown. the good faith which Union Oil Company and Marathon Oil Company put forth to comply with the Committee's orders pro- hibiting the flaring of casinghead gas. Although my presentation C~ J . ~ -37- has been quite lengthy, I have covered only the major points of the project; and I would now solicit any questions that. you may have, Thank you. CLP./jmk It ~.~ • • • MECHANICAL ENGINEERING TESTIMONY My name is Richard Keller, and I am currently Area Engineer for Union Oil Company, Anchorage District, Alaska. My purpose here today is to describe the gas to shore transportation capabilities of each platform in the McArthur River Field, Trading Bay Unit. Thee McArthur River Field, Trading Bay Unit platforms: Grayling, • • Dolly Vanden, and King Salmon, all either now have, or will have ade- quate capacity to transport all. excess casinghead gas to shore for disposition in compliance with Conservation Order No. 104, by July 1 , 19 72 . .Specifically: 1. The Grayling platform now has adequate gas compression and treating facilities to transport all excess casinghead gas, not used as fuel, to shore. One of the two gas to shore compressors will be overhauled, and the compressor discharge relief valves will be replaced in order to achieve the required capacity. This work should be completed by July 1, 1972, The gas to shore compressors consist of two 1100 Hp, turbine-driven, centrifugal compressors, operating in paral el. These two compressors have a combined capacity of 20,000 MCF/D, with an intake pressure of 50 psig and. a discharge pressure of 250 psig. The current solution gas production is approximately 18,000 MCT/D, end is expected to decline. de.e~ioN r~w~ ~ ~~4~1~cvi~ • • • 2. The Dolly Varden platform now has adequate compression anal. treating facilities to transport to shore all produced casinghead gas not used as fuel or needed fora safety pilot. No modifications will be required on this platform in order to comply with the no-flare order . The gas compression facility on the Dolly Varden platform consists of two 3000 Hp, three-stage reciprocal compressor units. A portion of the horsepower developed in the first stage in each compressor unit is utilized to transport cosinghead gas to shore and supply fuel needs. This gas is compressed from 90 to 250 psig. The first stage has capacity i n exce s of the current 12 , 0 00 MCF/D solution ga s • production . 3. The King Salmon platform also now has adequate compression and treating facilities to transport to shore all casinghead gas not used as fuel on the platform or needed for a safety pilot. The gas to shore compression is accomplished by an 1100 Hp, turbine- driven, centrifugal compressor, capable of delivering 10,000 MCF/D at a discharge pressure of 250 psig, expected operating conditions when the LEX modification is complete. This compression equipment is sufficient to handle all produced solution. gas, which will be trans- ported to shore and utilized. as fuel on the platform. Current solution gas production is averaging 8500 MCF/D, and is expected to decline. • This, then, summarizes the. status of the. Trading Bay Unit platforms' ability to comply with the no-flare order. These platforms will be ready to R. C . Keller 5/11/`72 . ~ r • • • deliver all excess casinghead gas into the new gas gathering system when it is complete , • .. R, C . Keller 5/11/72. _3_ F. MECHANICAL ENGINEERI;JG TESTIP~^ONY My name is Richard Keller, and I am currently Area Engineer for Union Oil Company, Anchorage District, Alaska. r1y purpose here today is to describe the gas to shore transportation capability of .the P4onopod platform, Trading Bay Field. Union Oil Company operates the hlonopod platform, located ~in the Trading Bay Field. This platform ti,,~ill have adequate facilities to transport all excess casinghead gas to shore, in compliance with Conser- vation Order No. 103, by September 1, 1972. We are now in the process of removing two 945-Horsepower com- pressor packages from the platform in order to make room for nei~r com- pression equipment needed in order to comply 4~aith Conservation Orde r Pdo. 103. Five near compressors are being installed fora total of 7700 Horsepower. New. process equipment--heat exchangers, scrubbers, and de- hydration equipment--is also being installed. Two compressor sets, each consisting of tGA~o compressors driven by a 33.00 Hp.turbine, will supply the gas to shore, fuel needs, and gas lift gas at a pressure of 500 psig. An 1100 Hp turbine-driven, centri- fugal compressor will boost gas lift gas from 500 psig to 1100 psig. Our total gas to shore transportation capacity, uaith the neva system operational, will be in excess of 20,000 ~~1CF/D, at expected operat- ing pressures of 50 psig intake, 500 psig discharge. Current solution gas production is averaging 15,000 MCF/D. As stated, we expect this ne~r~ equipment to be operational by September.. 1, 1972. t ~11c~- trc~ec~~.~ lti ~-..dNsc~,~1" R. C. Keller a J ~ .~N d u wl / c ~~ a N s ~ r~ ~"f " 5/11/72' • i• i• • TRADING BAY FIELD HEARING MAY 11, 1972 ATLANTIC RICHFIELD COMPANY EXHIBITS /.- `{ ~ ~~ .~ ~~ .~ ~ ~~a Ns ~ ~ ~ p~ ~.~/so , u ('~. I o 3~ ~~ l a s i~ • ~~MONOPOD~ ~~ i EXHIBIT AtlanticRichfielciCompany ;; TRADING BAY FlELD HEARING MAY I I, 1972 LOCATION MAP • • • PLATFORM ~~A~~ SAFETY PILOT 400 Mcf/D FORMATTON GAS I 1080 Mcf/D I t FUEL 500 Mcf/D PLATFORM -SPARK SAFETY PILOT 600 Mcf/D FORMATION GAS 1500 Mcf/D. --a FUEL 1400 Mcf/D TO SHORE 180 Mcf/D -~ 1~ ~l tj ~~~ `~~ ~I I !' ~~ I' i, EXHIBIT 2 AtianticRichfieldCompany "~ TRADING BAY FIELD HEARING MAY 11,1972 PLATFORMS AandSPARK GAS AVAILABILITY NIKOLAI WELL N°O-3 (Limited Emergency Fuel ) .r- (~ ON-SHORE FACILITIES `J 430 Mcf/D a --~ f' 250 Mcf/D 500 Mcf/D ~~ ~~ r~ 1~ 1- 1` GAS FROM MOBIL-UNION 750 Mct/D • i'~~ • • • WT F7 ELLJL= ~. Division of Oil and Gas 3001 Porcupine Drive Anchorage, Alaska CClNoERVATION SOCic=E'Y HULA CHAPTER P. O.. BOX 563 SOLDOTI`A ALASKA 99669 T1a 5 ~,1,.Q724 ~ ~. ~~ ;~_;! p A~1 ~M~ l~ ~..i~~ ~Y~ C O, DIR C. GEOL. C. ENG ENS _~. ~ ~ eNG ~- 3 ENG I T ~ i~ 4 E Ni' ~ --- ~ _ 5 FNG, I I . .- -_.. 1 GFc?L I . " --~ I . _ ~2 GEOL ~ - 1 3 GEOL ~ -... ` .. REV _` ~ s,~c~ CO _ NFER; Fr>_~f.~oz• r lox= Rio ~ioy-A,los•A "".~ RE: Rec{uest for delay on termination of Cook Inlet offshore flaring This organization would oppose a delay in termination of offshore flaring for the following reasons: 1. Continued flaring provides obvious air pollution which can be seen from Kenai almost any day as a low-lying cloud of black (the evening of 4/23/72, it looked yellow-greenish) smoke over the Inlet. 2. The flaring of the offshore casinghead gas is a waste of a resource. 3. The additional wasting of the resource should not be permitted to continue --- lest it make the installation of"another LNG plant or other such type of gas reprocessing for trans-shipment less economically feasible. Does not the fact that the proposed plant under consideration by Pacific Electric Service Co. contradict the earlier statements regarding lack of feasibility for the usage of the gas from the offshore platforms? 4. F.ven if it may be essential to extend the deadline, this organization recommends that it be done on a month=to-month basis with the review required for continuing extensions of an additional month. JA S E. FISHER Pr sident P. S. The Pipe coating is not being accomplished in Alaska for the project. I~ the lack of the 60-80 jobs involved in the required pipe coating considered by this Division in its~de h$ratons over the delay in gas flaring termination deadline? .~f~~ ~ ~1 i i NOTICE OF PUBLIC HEARING STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES Alaska Oil and Gas Conservation Committee Conservation File Nos. 102, 103, 104 and 105 Re: The application of Union Oil Company of California, Atlantic Richfield Company, Sheli Oii Company, and Amoco Production Company for orders amending Rule No. 2 of Conservation Order Nos. 102, .103, 104 and 105 by deleting the date "July I, 1972" and substituting in its place the date "November I, 1972". Notice is hereby given that the referenced companies have requested the Oil and Gas Conservation Committee to issue orders which extend the period of time from July (, (972 to Povember I, (972, during which casinghead gas in addition to the amount necessary for safety can he flared from the oil pools identified in the referenced conservation orders covering the following fields; Granite Point, Trading Bay, McArthur River, and ~^iddle Ground Shoal. The hearing will be held at 9:00 a.m., ~1ay il, 1972, in the City Council Chambers of the Z. J. Loussac Library, 5th Avenue and F Street, Anchorage, Alaska, at which time operators of the identified oil pools and affected and interested parties will be heard. ~~II/L~~i'V'~~K Thomas R. Marshall, Jr. Executive Secretary Alaska Oil and Gas Conservation Committee 3001 Porcupine Drive Anchorage, Alaska 99504 Publish; April 14, (972 AFFiD~-VIT ®F STATE OF ALASKA, ) THIRD JUDICIAL DISTRICT,) ss. -----r`J~3t--I~_.Shak~-------------------- being first duly sworn on oath deposes and says that__ she is the_.. Le~al_ Clerk-,--- of the Anchorage News, a daily news- paper. That said newspaper has been approved as a legal news- paper by the Third Judicial Court, Anchorage, Alaska, and it is now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all of said time was printed in an office maintained at the aforesaid place of publication of said news- paper. That the annexed is a true copy of a .-Teal __--.- lv_otice as it was published in regular issues (and not in supplemental form) of said newspaper for. a period of --___one _ insertions, commencing on the __14____day of _-Aprl___-_.-____,19 7z. ,and ending on the_-___1`~_-_...... day of both dates .inclusive, and that such newspaper was regularly distributed to its subscribers dur- ing all of said period. That the full amount of the fee charged for the foregoing publication is PU~LICATI®N NOTICE OF PUBLIC NEARING STATE Of ALASKA DEPARTMENT OF NATURAL RESOURCES Alaska Oil ..end Ge; Conservation Committee Conservation fife Nos. 102,. '103, lb4 and los Re: The applies#ion-Of Union: 021 Company of California, Atlantie Richfield 'Com- pany, 3he11 Oil Company, and Amoco Production Coritpany far orders smend- ind Rule No. 2 -df Conservation Order Nos. 102,103, 104 end 105. by delet- ing-thedefe"July 1, 1972" andsub- sTituting'in its place tha data "Novem• bar l; 1972„ - .~ '~ ~ 130 Notice is hereby given that the refer- enced"companies have requested The Oil and Gas"Conservation Committee- to issur orders i whicfi' extend the period ` of time `from -; July 1, 1.972 fo November 1, 1972, during which casinghead ass in addition to the amount necessary "for. safety can be flared from the pit pools .identified in 4he refer enced conservation orders covennq the fol- lowing fields: -Granite Point, Trading Bay, McArthur'River, end Middle Ground Shoal. The hearing will ba held et 9:00 a.m., Mey'l1,-1972, in the City Council Cham- bars of the Z.J. Loussac Library, 5th Ave- 'nue and F Street, Anchdrage, Alaska, at whieh time operators of the identified oil pools and affected and interestad parties , will 6e heard. Thomas R. Marhall, 1r. Executive Secretary Alaska Oil and Gas Conservation Committee - 3001 Porcupine Drive Anchorage,-Alaska: 99504 i Publish: ,April 14, 1972 ~ Le9el Notice No. 1430 the sum of $ 12.5 which amount has been paid in full at the rate of 25¢ per line; Mini- mum charge $7.50. f ~ , ;% /~ / - ,~ Subscribed sworn to before me this -1- --- day of_ ~!pril_--_-_, 19.~~ ~ -.-- ~~ - Notary Public in and for the State of Alaska, Third Division, Anchorage, Alaska MY COMMISSION EXPIRES f ®~+ .~ -~~ w, 3 3~. _ .. _~ # V 1972 APR 12 PM 4 57 AL361 e___ ~'o, ~ r t x +* , p w r r., a.:, ~ ~ ~ ~~ ~... t;,;r L a y j 4 /~ { {{ rr i ns, Ine. /~ ~~ U, ,~~;,~~M~ n ~ ~~ AQR 1 ~ 1972 bl~`1Ai(~N OF OIL ANp GAS YQYP PST APR 12 ?2 LA 16A NSA225 Acvc.~o2AG NS NSA350 C 1-0120 71A 103)PD 04/ 12/72 1800 T W X AMOC 0 PROD D NV Z C Z C0 01 D E NVEOEL 0 4/ 12/72 PMS MR. HOMER L. BURRELL, CHAIRMAN ALASKA OIL AND GAS CONSERVATION CO M~J . ..._ ~~.~.:~, -~~ D IVISION OF OIL AND GAS 3001 PORCUPINE DRIVE PLEASE DELIVER ____ ANCHORAGE, AL AMO CO R EQUEST5 MAY 11 HEARING T 0 AMEND CONSERVATION ORDERS 105 AND 102 FOR MID D LE GR OUND SHOAL AND GRANITE POINT FIELDS RESPECTIVELY BY ~ ~XT~vb I NG J ULY 1 , 19 72, FLARE CURTAILMENT DEADLINES TO NOVEMBER 1, 1972, A N D R EQUEST NORMAL 30 DAY ADVERTISING PERIOD FOR SUCH HEARINGS BE WAIVED IN T HESE INSTANCES AMOCO PR OD UCTION COMPANY SECURITY LIFE BUILDING D ENVER , .COLORADO 80202 4 / 12/ ?2 KB NNNN 1 g03 EST +e ~ S
