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Home My WebLink AboutCO 492 AINDEX CONSERVATION ORDER NO. 492A Prudhoe Bay Annulus Pressure 1. February 24, 2020 Request to amend Conservation Order No. 492 rule 3(a) and 6(a) 2. March 3, 2020 Notice of Hearing, Affidavit of publication, e-mail Distribution list, bulk mailing. ORDERS STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7'h Avenue Anchorage, Alaska 99501 In the Matter of: ) Docket Number: CO -20-004 Conservation Order No. 492A Hilcorp North Slope, LLC's application to revise the inner annulus pressure threshold on production wells that requires notification of the Alaska Oil and Gas Conservation Commission (AOGCC) and the AOGCC's own motion to add an administrative action clause. IT APPEARING THAT: Prudhoe Bay Unit: All Production October 1, 2020 By letter dated February 24, 2020, Hilcorp North Slope, LLC (HNS)t applied to change the inner annulus pressure threshold that requires notification of the Alaska Oil and Gas Conservation Commission (AOGCC) from 2,000 psig to 2,100 prig for production wells in the Prudhoe Bay Unit (PBU) that are not processed through the Lisburne Production Facility (LPC). 2. On its own motion, the AOGCC proposed to adopt an administrative action rule. Pursuant to 20 AAC 25.540, the AOGCC tentatively scheduled public hearings for April 7, 2020, and June 25, 2020. On March 2, 2020, and May 21, 2020, the AOGCC published notice of the opportunity for that hearing on the State of Alaska's Online Public Notice website and on the AOGCC's website, electronically transmitted the notice to all persons on the AOGCC's email distribution list and mailed printed copies of the notice to all persons on the AOGCC's mailing distribution list. On March 3, 2020, May 22, 2020, the AOGCC published the notice in the ANCHORAGE DAILY NEWS. 4. No comments or requests for hearings were received. 5. The tentatively scheduled hearings were vacated. 6. HNS's application provided sufficient information upon which to make an informed decision. The February 24, 2020, application was submitted by BP Exploration (Alaska) Inc. (BPXA) as operator of the PBU but effective on July 1, 2020, BPXA came under new ownership and was renamed FINS. HNS is currently the operator of the PBU. Conservation Order 492A October 1, 2020 Page 2 of 5 FINDINGS: 1. HNS is the operator of the Prudhoe Bay Unit (PBU), located on the North Slope of Alaska. 2. Conservation Order No. 492 (CO 492) was issued on June 26, 2003 and established, among other things, inner annulus pressure thresholds that would trigger the requirement for the operator to notify the AOGCC. These limits were set at 2,000 psig for all PBU wells not processed at the LPC and 2,500 psig for wells that were processed at the LPC. The notification threshold on outer annulus pressure for all PBU wells is 1,000 psig. 3. These pressure limits only require notification from the operator. No corrective action is required. 4. Operational changes at PBU, most notably an increase in the gas lift header pressure, has contributed to the 2,000 psig pressure threshold being exceeded more frequently. 5. 14NS proposes increasing the 2,000 psig threshold to 2,100 psig to reduce the frequency that notifications would need to be made. 6. Additionally, inner and outer annuli are subject to a notification and corrective action requirement if the pressure exceeds 45% of the casing burst rating, 7. CO 492 did not contain an administrative action clause. 8. There are several production wells in the PBU that are not in a defined pool and thus not covered by any pool rules. CONCLUSIONS: 1. It appears that HNS has continued to follow the sustained annulus pressure policies and procedures originally developed by BP Exploration (Alaska) Inc. (BPXA) for the PBU to address the management of annular pressures in production wells. 2. Increasing the inner annulus threshold pressure to accommodate changes in field operations that have occurred since CO 492 was first issued is appropriate. 3. Changing the inner annulus notification pressure from the current requirement of 2,000 psig to 2,100 psig for wells not processed at the LPC will reduce the number of notifications that are not indicative of a potential loss of containment for the well. The notification requirements for wells processed through the LPC will remain unchanged. 4. The required notification and corrective action when a production well's IA sustained pressure exceeds 45% of its burst pressure remains intact. Conservation Order 492A October 1, 2020 Page 3 of 5 5. Inserting the annular pressure rule language into pool rules for all of the defined pools in the PBU and keeping it in this order to cover the PBU wells that are not in defined pools ensures that 100% of the production wells in the PBU are covered by these rules. 6. CO 492 stated it applied to development wells. For clarification, "development" well has been changed to "production" well in this order to specify that these rules apply only to production wells. Mechanical integrity rules for injection wells are covered in injection orders. 7. Inserting an administrative action clause so the parameters of this order can be modified in the future without the need to provide public notice and opportunity for comment and hearing will make it easier to respond to potential operational changes in the future, and is consistent with other AOGCC orders. 8. Findings and Conclusions previously included in CO 492 are appropriate and are incorporated by reference into this order. NOW THEREFORE IT IS ORDERED that Conservation Order No. 492 is hereby superseded by this order and the following Annular Pressure of Production Wells rule applies to all production wells in the PBU. This rule has been incorporated into the pool rules for all defined oil pools in the PBU. Annular Pressure of Production Wells a. At the time of installation or replacement, the operator shall conduct and document a pressure test of tubulars and completion equipment in each production well that is sufficient to demonstrate that planned well operations will not result in failure of well integrity, uncontrolled release of fluid or pressure, or threat to human safety. b. The operator shall monitor each production well daily to check for sustained pressure, except if prevented by extreme weather conditions, emergency situations, or similar unavoidable circumstances. Monitoring results shall be made available for AOGCC inspection. c. The operator shall notify the AOGCC within three working days after the operator identifies a well as having (1) sustained inner annulus pressure that exceeds 2500 psig for wells processed through the Lisburne Processing Center and 2100 psig for all other production wells, or (2) sustained outer annulus pressure that exceeds 1000 psig. d. The AOGCC may require the operator to submit in an Application for Sundry Approvals (Form 10-403) a proposal for corrective action or increased surveillance for any production well having sustained pressure that exceeds a limit set out in paragraph (c) of this rule. The operator shall give the AOGCC notice consistent Conservation Order 492A October 1, 2020 Page 4 of 5 with the requirements of Industry Guidance Bulletin 10-01A of the testing schedule to allow the AOGCC to witness the tests. e. If the operator identifies sustained pressure in the inner annulus of a production well that exceeds 45% of the burst pressure rating of the well's production casing for inner annulus pressure, or sustained pressure in the outer annulus that exceeds 45% of the burst pressure rating of the well's surface casing for outer annulus pressure, the operator shall notify the AOGCC within three working days and take corrective action. Unless well conditions require the operator to take emergency corrective action before AOGCC approval can be obtained, the operator shall submit in an Application for Sundry Approvals (Form 10-403) a proposal for corrective action. The operator shall give the AOGCC sufficient notice of the testing schedule to allow the AOGCC to witness the tests. Except as otherwise approved by the AOGCC under (d) or (e) of this rule, before a shut-in well is placed in service, any annulus pressure must be relieved to a sufficient degree (1) that the inner annulus pressure at operating temperature will be below 2000 psig, and (2) that the outer annulus pressure at operating temperature will be below 1000 psig. However, a well that is subject to (c) but not (e) of this rule may reach an annulus pressure at operating temperature that is described in the operator's notification to the AOGCC under (c) of this rule, unless the AOGCC prescribes a different limit. g. For purposes of this rule, 1. "inner annulus" means the space in a well between tubing and production casing; 2. "outer annulus" means the space in a well between production casing and surface casing; 3. "sustained pressure" means pressure that (A) is measurable at the casing head of an annulus, (B) is not caused solely by temperature fluctuations, and (C) is not pressure that has been applied intentionally. Conservation Order 492A October 1, 2020 Page 5 of 5 Administrative Actions: Upon proper application, or its own motion, and unless notice and public hearing is otherwise required, the AOGCC may administratively waive the requirements of any rule stated herein or administratively amend this order as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. DONE at Anchorage, Alaska and dated October 1, 2020. Jeremy Dq Wly sgnedW Jeremy M. Rl[e WIe:30E0.10A1 M. Price Jeremy M. Price Chair, Commissioner Daniel T. Digitally signed by Daniel T. Ses"Umt. L. Seamount, Jr. Data 2020AD.01 10.11.4748W Daniel T. Seamount, Jr Commissioner Jessie L. Digitally signed by Jessie L Chmielowski Chmielowski Date:2020.10.01 10:13.9 -08'00' Jessie L. Chmielowski Commissioner As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs Bernie Karl K&K Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711 George Vaught, Jr. P.O. Box 13557 Denver, CO 80201-3557 Gordon Severson 3201 Westmar Cir. Anchorage, AK 99508-4336 Darwin Waldsmith P.O. Box 39309 Ninilchik, AK 99639 Richard Wagner P.O. Box 60868 Fairbanks, AK 99706 i INDEXES STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER SUDMITINVOICE SHOWING ADVERTISINGORDER NO., CERTIFIED APFIDAVITOFPUDAIDCAERT MEHT.TIACREDCOPY OF ADVERTISING ORDER NUMBER AO -08-20-021 O FROM: AGENCY CONTACT: Jody Colombie/Samantha Carlisle Alaska Oil and Gas Conservation Commission DATE OF A.O.AGENCY PHONE: 333 West 7th Avenue 322020 907 279-1433 Anchorage, Alaska 99501 DATES ADVERTISEMENT REQUIRED: COMPANY CONTACT NAME: PHONE NUMBER: ASAP FAX NUMBER: 907 276-7542 TO PUBLISHER: SPECIAL INSTRUCTIONS: Anchorage Daily News LLC PO Box 140147 Anchorage, Alaska 99514-0174 TYPE OF ADVERTISEMENT: LEGAL DISPLAY r CLASSIFIED r OTHER (Specify below) DESCRIPTION PRICE CO -20-004 Initials of who prepared AO: Alaska Non -Taxable 92-600185 SUBMITINVOICE SHOWINGADVERTISING ORDER NO., CERTIFIED AFFIDAVITOF PUBLICATION WITBATTACHED COPYOF ADVERTISMENT TO: AOGCC 333 West 7th Avenue Anehore e, Alaska 99501 Pae 1 of 1 Total of All Pa es $ REF Type Number Amaunt Date Comments I PvN IVCO21795 2 AD AO -08.20.021 3 4 FN AMOUNT SY Act. Template PGM LGR object FY DIST LIQ 1 20 AOGCC 3046 20 2 3 4 5 Parch ori tle: Purchasing Authority's SigneNre Telephone Number 1 A. i' a n e st appear on all invoices and documents relating to this purchase. stateisregistered lortaxlree transactions under Chapter 32,IRScode. Registration number 92-73-0005 K. Items are for the exclusive use of the state and f rresale. DISTRIBUTION: Division Fiscal/Original AO Copies: Publisher (faxed), Division Fiscal, Receiving Form: 02-901 Revised: 3/2/2020 D U P L I CAT E Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO -20-004 Prudhoe Bay Field, All Pools BP Exploration Alaska, Inc., by application received February 24, 2020, requests the Alaska Oil and Gas Conservation Commission (AOGCC) revise Rule 3(a) and 6(b) of Conservation Order 492 be changed from 2000psi to 2100 psi (excluding jet pumps) for wells not processed through the Lisburne Processing Center to help minimize board and well pad operators responding to false alerts and on its own motion to add the language that "unless notice and public hearing are otherwise required, upon proper application the AOGCC may administratively amend this order as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater." The AOGCC has tentatively scheduled a public hearing on this application for April 7, 2020, at 10:00 a.m. at 333 West 7`h Avenue, Anchorage, Alaska 99501. To request that the tentatively scheduled hearing be held, a written request must be filed with the AOGCC no later than 4:30 p.m. on March 20, 2020. If a request for a hearing is not timely filed, the AOGCC may consider the issuance of an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 793-1221 after April 5, 2020. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7`h Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on April 4, 2020, except that, if a hearing is held, comments must be received no later than the conclusion of the April 7, 2020 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at (907) 793-1221, no later than Bernie Karl K&K Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711 George Vaught, Jr. P.O. Box 13557 Gordon Severson 3201 Westmar Cir. Anchorage, AK 99508-4336 Darwin Waldsmith P.O. Box 39309 Penny Vadla 399 W. Riverview Ave. Soldotna, AK 99669-7714 Richard Wagner P.O. Box 60868 Denver, CO 80201-3557 Ninilchik, AK 99639 Fairbanks, AK 99706 Colombie, Jody J (CED) From: ANC Legal Ads <legalads@adn.com> Sent: Monday, March 2, 2020 2:11 PM To: Colombie, Jody 1 (CED) Subject: Re: FW: Public Notice Hello, Below is the quote/proof. Please let me know if this is approved to run before 3pm today. Order Number: Order Status: Saved Classification Legals &Public Notices Package: LegalsADN Final Cost 239.06 Referral Code: AO -08-20-021 Payment Type: User ID: W0010445 ACCOUNT INFORMATION ST OF AK OILAN D GAS CONSERVATION COMMISSION 333 W. 7TH AVE STE 100 ANCHORAGE, AK 99501 907-279-1433 legalads@adn.com ST OF AK/AK OIL AND GAS CONSERVATION COMMISSION SCHEDULE FOR AD NUMBER W0011465 Tue Mar 3, 2020 Anchorage Daily News Legals 1 Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMIS'. Re: Docket Number Co -20-004 Prudhoe Bay Field, All Pools BP Exploration Alaska, Inc., by application received Feb 2020, requests the Alaska Oil and Gas Conservation C01 (AOGCC) reVISe Rule 3(a) and 6(b) of Conservation( Ord( and on Its own motion to add the language that"unless n public hearing are otherwise required, upon proper al the AOGCC may administratively amend this order as to charge does not promote waste or Jeopardize correlate Is based on sound engineering and�qeoscience principle: not result In an Increased risk of flulc movement Into fre: The AOGCC has tentatively scheduled a public he this application for April 7, 2020, at 10:00 a.m. at 333 Avenue, Anchorage, Alaska 99501. Tb request that the b scheduled hearing be held, a written request must be file( AOGCC no later tltan 4:30 p.m. on March 20, 2020. If a request for a hearing Is not timely filed, the A0, consider the Issuance of an order without a hearing To Ic AOGCC will hold the hearing, call (907) 793-1221 after Apr In addition, written comments regarding this appllcatla submitted to the AOGCC, at 333 West 7th Avenue, Al Alaska 99501. comments must be received no later I p.m. on April 4, 2020 except that, if a hearing is held, o must be Waived no later than the conclusion of the Apr hearing If, because of a disability, special accommodations may b to comment or attend the hearing, contact the AOGCC Assistant, Jody COIOmble, at (907) 793-1221, no later tha 2020, i/signature on file# Jeremy M. Price chair, commissioner Published: March 3, 2020 Previc Your Ad by BP Exploration(Alaska)Inc. bwvvd Attn: Well Integrity Coordinator, PRB-20 Post Office Box 196612 Anchorage, Alaska 99519-6612 February 24, 2020 Mr. Jeremy Price Alaska Oil and Gas Conservation Commission 333 West 711 Avenue Anchorage, Alaska 99501 Subject: Request to amend Conservation Order No. 492 rule 3(a) and 6(a). Dear Mr. Price, BP Exploration (Alaska) Inc. requests an amendment to Conservation Order No. 492 rule 3(a) and 6(a) such that current notification and pressure limits are changed from 2000psi to 2100 psi for wells not processed through the Lisburne Processing Center. Current maximum gas lift header pressure in the Prudhoe Bay field for wells not processed through the Lisburne Processing Center regularly exceeds 2000psi. The field - wide IA (Inner Annulus) NOL (Normal Operating Limit) is set at 2000 psi for non -Lisburne development wells, excluding jet pump wells. Beginning in 2015 BPXA began installation of wireless digital annulus pressure gauges on all wells, this was completed in late 2019. Due to the increased accuracy of the annulus pressure readings and realtime monitoring/alerting capability, board operators are now very frequently responding to false alerts of IA NOL excursions on gas lifted wells due to gas lift header pressure exceeding 2000 psi, not sustained casing pressure as intended. BPXA requests that rule 3(a) and 6(a) be changed from 2000psi to 2100 psi (excluding jet pumps) for wells not processed through the Lisburne Processing Center to help minimize board and well pad operators responding to false alerts. If you have any questions, please call me at 564-5430. Sincerely, / Gtr Ryan Daniel BPXA Well Integrity Team Lead Attachments: Technical Justification ORIGINAL RECEIVED FEB 2 4 2020 A 0 G 0 Technical Justification for Conservation Order No. 492 Amendment February 24, 2020 History and Status: Gas lift header pressure at many of the drill sites and pads in the Prudhoe Bay field (excluding wells processed through the Lisburne Process Center) regularly exceeds the 2000 psi IA NOL set for development wells. Gas lift compressor outlet pressures are commonly set at 2100 psi. Historical gas lift pressures can be seen in Figure 1 & 2 for reference. The legacy IA NOL value of 2000 psi was set to remain compliant with Conservation Order No. 492 rule 3(a) and 6(a). Prior to the installation and monitoring of wireless annulus pressure gauges this was not as large of a problem due to one IA pressure read being recorded via mechanical gauge daily per well. If a pressure read exceeded the 2000 psi NOL it was reported to Well Integrity and evaluated to determine if the excursion was SCP or not. Currently all wells in the Prudhoe Bay field have the inner annulus pressures monitored in real-time by either the EOA or WOA production center board operators. The board operators are notified with an alert when the IA pressure of a well exceeds the set NOL value of 2000 psi. This ensures a timely notification and response to any potential excursion event. With the utilization of the wireless annulus pressure gauge alerting it has become an ongoing problem where wells supplied with gas lift pressure are regularly setting off alerts due to the gas lift supply pressure exceeding the 2000 psi NOL and not due to SCP as intended. This excessive alerting has the potential to desensitize workers to possible hazardous occurrences. Increasing IA NOL from 2000 psi to 2100 psi for development wells would eliminate the majority of these false NOL excursion alerts and allow resources to be more focused on response and evaluation of probable SCP events. This increase of 100 psi to the IA NOL is well within the design parameters of development wells across the Prudhoe Bay field. All development wells are included in this request in an effort to reduce the complexity of the IA NOL change. While non gas lifted wells are not subject to the same false alerts there is an increased risk of operating the field with IA NOLs varying for different types of wells. The use of gas lift on development wells, including natural flow producers, is continually changing, some require gas lift for kick off purposes only while others need constant gas lift. Gas lift usage may also change as a well ages depending on depletion or may change due to well work such as add pert/ reperf interventions. The tracking of these dynamic changes would be very difficult and the continual changing of NOL between 2000 psi and 2100 psi for individual wells in multiple data and control systems would greatly increase the complexity and management of NOLs across the field. This inconsistency in IA NOLs would be difficult for field personnel to continually keep track of and would reduce their effectiveness in identification of potential SCP events and would potentially result in misreporting of excursions. The IA NOL increase would not reduce the ability to identify SCP excursions in non -gas lifted wells. BPXA currently monitors development wells for minimum tubing by IA differential pressure thresholds as an indicator of communication. In addition to this SITP of non - gas lifted wells is in excess of 2100 psi, which if seen on the IA would indicate a loss of tubing integrity and would flag as SCP. Based on this it is requested to increase the IA NOL for all development wells (excluding jet pump wells and those processed through the Lisburn Processing Center) to 2100 psi. 8 r:mDm HWm 9/Iy101S 5/1/101s Figure 1- EOA DS Gas Lift Header Pressure EOA Gas Lift Pressure umm i ,1 � Havm 3/ ]/N15 5/1/101! 6)SQ'Sm5 8/9/1015 9/]&%135 33/3'//z03$ 1/6(]016 2(SY]0tb Me Figure 2- WOA Pad Gas Lift Header Pressure WOA Gas Lift Pressure 9)Sb]Ot5 :i/11/1035 :16i Gt6 3JSY30 6 (tale —xvv —vs Ds —mva —DSCS —vs m —m ce —DS It —M 1] —Ds 11 —Ds la —M]fi —vs n —A Pee —HPaE —DPa] nPaa —IPatl —lPM —MPaG — PPS v Pae —spas u vas v wtl w Pae xPm . we z Pae