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Home My WebLink AboutO 154BP EXPLORATION October 29, 1999 Alaska Oil and Gas Conservation Commission Robert N. Christenson P.E., Chairman 3001 Porcupine Drive Anchorage, AK 99501-3192 Re: Decision on Rehearing Waste Classification for Gathering Center 3 ("GC -3") K-5500 Flaring, November/December 1998 Dear Chairman Christenson, BP Exploration (Alaska) Inc. 900 East Benson Boulevard P.O. Box 196612 Anchorage, Alaska 99519-6612 (907) 561-5111 Please find enclosed, in accordance with the Commission's order of October 1, 1999, a chem to the Commission in the amount of $4131.39. We appreciate the opportunity provided by the Comrnission to review the facts of this issue and are confident that procedures now in place will result in reducing flaring to minimum volumes at GC -3. We remain committed to safe operations in Prudhoe with no harm to the environment and are actively working to minimize emissions and reduce flaring. Should you have any further questions regarding this matter please contact Greg Cooke at (907)564-4345. Sincerely, Neil Cleary B Alaska) Prudhoe Bay Field Manager Anchorage, Alaska cc: Tim Holt 0 BP EXPLORATION, (ALASKA) INC. NATIONAL s=a� NO. P 01 51 86 PRUDHOE BAY UNIT CONSOLIDATED COMMERCIAL ACCOUNT PO BOX 196612 ANCHORAGE, AK 99519-6612 00015186 SAY FOUR THOUSAND ONE HUNDRED THIRTY ONE & 39/100****######*# US DOLLAR fo The ALASKA OIL AND GAS 3Ri CONSERVATION COMMISSION Of 3001 PORCUPINE DRIVE ANCHORAGE AK 99501 DATE AMOUNT 10/27f99 84, 131.39 NOT VALID AFTER IM DAYS Ii'0IS IJ3G0 1:04120389 S1: 012489611' f C -,j d3 , TONY KNOWLES, GOVERNOR ALASKA OIL AND GAS 3001 PORCLWNE.DRIVE CONSERVATION COMMISSION VNCH0RACE.A1ASKA 99-90"192 PHONE: ("7)279-1433 TELECOM (901).76-1542 October 1, 1999 Neil R. McCleary Prudhoe Bay Field Manager BP Exploration (Alaska) Inc. PO Box 196612 Anchorage, AK 99519-6612 Re: Decision on Rehearing Waste Classification for Gathering Center 3 ("GC 3") K-5500 Flaring, Nov./Dec. 1998. Dear Mr. McCleary: On September 8, 1999, the Commission conducted a rehearing with respect to its June 29, 1999 decision to classify as waste and to impose penalties on 14,065 mscf of gas flared at the GC3 K- 5500 facility during November and December 1998. It is clear from information submitted during this review that operating procedures consistent with good oil field engineering practices are available to BPX to minimize flaring during a shut -down of the K-5500 wet gas compressor. These procedures are designed to reduce the flow of gas into and through the GC -3 facility, and do not require a full plant shut down. They include prorating operations so that only one oil skim tank is operating, shutting in the sweep gas to the produced water tanks, and shutting in high water cut wells and all high pressure production. BPX formally adopted such operating procedures on April 28, 1999. As adopted, these procedures become more aggressive in reducing gas flow into and through the facility as the duration of the event lengthens, and are designed to reduce flaring to minimum volumes within seven hours following a K-5500 shut down. Accordingly, and for the reasons stated below, the Commission has decided to reaffirm in part and vacate in pan its decision to declare waste and impose penalties for those flaring events. November 6, 1998 Incident -2,667 mscf of gas flared. Summary of fads: The K-5500 gas turbine was shut down to remove a restrictive orifice plate around the temperature control valve. This was a planned event necessary for facility repairs that last 4.25 hours, longer than was anticipated. No action was taken to reduce the flow of gas into or through the facility to minimize flaring. Conclusion: Because there were steps that BPX could have taken to significantly reduce the volume of gas flared, the Commission reaffirms its decision to classify as waste and to penalize the entire volume of gas flared on November 6. December 13, 1998 Incident -5,585 mscf ofgas flared. Summary of fads: This is the first day of a three-day period in December in which 9,716 mscf of gas was flared following an automatic shut down of the K-5500 compressor and the subsequent attempts to determine the cause and make necessary repairs. This was an unplanned event. BP claims to have shut-in the sweep gas to the produced water tanks to reduce the volume of gas flared, but could not offer any substantiating evidence nor a reasonable estimate as to when this action was taken. No other action was taken to Page 2 0 reduce the flow of gas to the facility until about 2130 hrs when HP production was shut- in. Conclusion: Because there were steps that BPX could have taken to significantly reduce the volume of gas flared, the Commission reaffirms its decision to classify as waste and to penalize the entire volume of gas flared on December 13. December 14, 1998 Incident -3,539 mscf of gas flared. Summary of facts: This is a continuation of flaring that began December 13, The event was prolonged by the failure to have replacement filter in stock. BP chartered a jet to bring the filters directly from Calgary to Prudhoe Bay. Upon determining that it would be unable to restart the compressor prior to obtaining the filters, BP shut-in HP production at about 2130 hours on December 13 to minimize flaring. The replacement filters arrived and were installed on the afternoon of December 14; the compressor was then restarted by about 2100 hours. Conclusion: Although the failure to stock filters prolonged the event, BPX's efforts to reduce flaring were acceptable on this date. Accordingly, the Commission reaffirms its decision to classify the gas flared as waste, but exercises its discretion not to impose a penalty on the volume of gas flared on December 14 December 15, 1998 Incident -592 mscf of gas flared. Summary of facts: The K-5500 compressor shut down on high lube oil filter differential pressure. This was an unplanned event, which may or may not be related to the December 13/14 incident. No action was taken to reduce gas flow to the facility to minimize flaring. Conclusion: Because there were steps that BPX could have taken to significantly reduce the volume of gas flared, the Commission reaffirms its decision to classify as waste and to penalize the entire volume of gas flared on December 15. December 18, 1998-164 mscf of gas flared. Summary of facts: A vent blower door in Skid 515 was inadvertently shut down by a technician, which caused an immediate low pressure shutdown of the K-5500 compressor. This was an unplanned event. The volume of gas flared appears to support BP's belief that the sweep gas to the produced water tanks was shut-in to minimize flaring. Conclusion: The Commission vacates its decision to classify as waste the entire volume of gas flared on December 18. December 30, 1998-783 mscf of gas flared. Summary of facts: The K-5500 compressor shutdown for unknown reasons, although it may have been related to the shutting in of all HP production at GC I during repairs at B - pad. This was an unplanned event. The volume of gas flared appears to support BP's belief that the sweep gas to the produced water tank was shut-in to minimize flaring. Conclusion: The Commission vacates its decision to classify as waste the entire volume of gas flared on December 30. December 31,1998-735 mscf of gas flared. Summary of facts: Continuation of December 30 event, volume appears to support BP's belief that sweep gas to the produced water tanks was shut-in to minimize flaring. Conclusion: The Commission vacates it decision to classify as waste the entire volume of gas flared on December 30. Page 3 Accordingly, the Commission reaffirms its decision to classify as waste 12,383 mscf of the gas volume flared during the November/December incidents and to assess a penalty on 8,844 mscf of the volume declared wasted. The remaining volume of 3,539 mscf flared is authorized. THEREFORE rr IS ORDERED that the excess 12,383 mscf gas flared as a result of these incidents constitutes waste and a penalty on 8,844 mscf of this excess gas is assessed in the amount of $4,131.39. The Commission uses here a value of $ 0.53/mscf for November's gas and $ 0.44/mscf for December's gas. These figures are the royalty values for those months used by the Alaska Department of Natural Resources. The Commissions use of these figures does not constitute a determination of fair market valve for any other purpose. The penalty of $4,131.39 is due and payable within 30 days of the date of this order. DONE at Anchorage, Alaska and dated October 1, 1999 �VrL Robert N. Christenson, P.E., Chairman This decision is the final order of the Alaska Oil and Gas Conservation Commission. Any appeal to superior court must be brought within 30 days from the date that this decision is mailed or otherwise distributed. cc: Robert Reynolds, BPXA Robert Mintz, Dept. of Law Dan Dickinson, Dept. of Revenue Ken Boyd, Dept. of Natural Resources Don Gerwin, Dept of Natural Resources Bill Burkett - Kenai