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HomeMy WebLinkAboutCO 579 e e 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 inspection of the file. t_ () 5 7~ Order File Identifier Page Count from Scanned File: / á. (P (Count does include cover sheet) Page Count Matches Number in Scanning Preparation: VYES ~ Date d-J :J.O I 07 If NO in stage 1, page(s) discrepancies were found: YES Organizing (done) 1111111111111111111 o Two-sided RESCAN ~olor Items: o Greyscale Items: DIGITAL DATA o Diskettes, No. ~ther, Norrype: c..- \) o Poor Quality Originals: o Other: NOTES: Date ðjd.O/O 7 Date ;J. / J.{) I 0 7 BY: ~ Project Proofing BY: ~ Scanning Preparation BY: ~ x 30 = + Date d-.!d.O/O 7 Production Scanning Stage 1 BY: Stage 1 BY: Maria Date: Scanning is complete at this point unless rescanning is required. ReScanned BY: Maria Date: Comments about this file: o Rescan Needed 1111111111111111111 OVERSIZED (Scannable) o Maps: o Other Items Scannable by a Large Scanner OVERSIZED (Non-Scannable) o Logs of various kinds: o Other:: ~r /s/ 1111111111111111111 /s/ V11~ l~5 V\t1p = TOTAL PAGES (Count does not include cover sheet) /s/ 111111111111111111I NO /s/ VV\ f NO /s/ 1111111111111111111 111111111111111111I /s/ Quality Checked 1111111111111111111 10/6/2005 Orders File Cover Page. doc ID • INDEX CONSERVATION ORDER NO. 579 Nuiqsut Natural Gas Pipeline 1. September 14, 2006 North Borough request for variance in metering 2. September 28, 2006 Request for mailings 3. October 19, 2006 Notice of Hearing Arctic Sounder, affidavit of mailing, e-mail list, bulk mailing list October 22, 2006 Notice of Hearing Journal of Commerce, affidavit of mailing, e-mail list, bulk mailing list 4. November 27, 2006 Department of Natural Resource written comments 5. November 27, 2006 Depart of Revenue written comments 6. November 28, 2006 Hearing sign in sheet 7. November 28, 2006 Transcript, deliberative document located in Confidential Room 8. November 29, 2006 N/S Borough's supplemental submission 9. November 29, 2006 Additional comments from DNR 10. November 30, 2006 ConocoPhillips letter of support for the N/S Borough application 11. November 30, 2006 Follow -up comments from Dept of Revenue 12. December 09, 2006 Anchorage Daily News Article re: Natural Gas for Nuiqsut 13. December 21, 2006 Interim Conservation Order No. 579 14. January 11, 2007 ConocoPhillips Letter re: Custody Transfer Meter Installation Plan 15. January 22, 2007 DNR ltr to AOGCC re: Custody Transfer Meter Installation Plan 16. February 13, 2007 E -mail from ConocoPhillips to AOGCC re: Nuiqsut Metering 17. August 21, 2007 ConocoPhillips Letter re: Custody Transfer Meter Notification 18. November 30, 2007 NSB request for Consideration of Variance I CONSERVATION ORDER NO. 579 i III • 7 PETROLEUM NFWS • WEEK OF APRIL 25, 2010 • N A T U R A L G A S AOGCC investigating Colville offtakes Commission records suggest Conoco made early, excessive natural gas deliveries to Nuiqsut; AOGCC records don't match DNR records By ERIC LIDJI The monthly excesses range from 7.6 urements. For Petroleum News Because the AOGCC and mmcf to 21.5 mmcf, according to the Because the AOGCC and ConocoPhillips are declining to AOGCC. ConocoPhillips are declining to discuss the T he Alaska Oil and Gas Conservation discuss the matter while its under In his letter, Seamount wrote that the matter while it's under investigation, signify Commission is investigating whether investigation, significant questions early deliveries call into question "the volu- cant questions remain for now, such as why ConocoPhillips exceeded natural gas offtake remain for now metric measurement accuracy of gas it took so long for the AOGCC to realize allowances at the Colville River field. shipped to Nuiqsut" before Feb. 13, 2007. ConocoPhillips might be exceeding the off - Although Colville River is an oil field, lure to make a comment" because the com- He also wrote that AOGCC records shows a take allowance and how ConocoPhillips where natural gas is either used on site as pany was "still having discussions with the discrepancy between sale volumes made deliveries to Nuiqsut as early as 2006, e fuel or pumped back into reservoirs to AOGCC« ConocoPhillips reported to the AOGCC and if Nuiqsut didn't have an operational increase oil production, ConocoPhillips production volumes reported to the pipeline to get those deliveries from the field makes small natural gas deliveries to the Major questions remain Department of Natural Resources. to the village until 2008. nearby village of Nuiqsut to meet a contrac- In addition to ordering ConocoPhillips to If the investigation ultimately determines tual obligation. ConocoPhillips inherited the Nuiqsut stop exceeding the 1 mmcf daily offtake that ConocoPhillips did exceed its In February 2007, the AOGCC cleared contract when it assumed ownership of the allowance at the Colville River field, the allowance, it could also raise questions the way for ConocoPhillips to make these Colville River unit and the associated Alpine AOGCC also told the company to file a about North Slope metering, and about oil field from its original operator, ARCO ort by April 30 with information about whether the offtakes mi ht have ne ative- deliveries, setting a limit of 1 million cubic rep Y P g g per began feet when it ean natural gas deliveries to I impacted the ultimately oil recovery day, a rate the commission decided g 8 Y P Y Y would not promote waste, jeopardize cor- When ARCO sanctioned Alpine devel- Nuiqsut, why those deliveries exceeded the from the Colville River field. • relative rights, or compromise ultimate opment in 2000, the company negotiated a daily allowance and why AOGCC and DNR recovery" and would "not result in an deal with the village of Nuiqsut, getting records show different sales volumes and Contact Eric Ladji increased risk of fluid movement into fresh access to Native land on the North Slope in several points related to metering and meas- of er,drdy @n,oe.eon, return for a steady supply of natural gas to water. replace the expensive diesel Nuiqsut used In its 2007 order, the AOGCC prohibited for heating. Delta P Pump & Equipment LLC ConocoPhillips from taking off natural gas Because of delays getting a pipeline to from any Colville River field for any reason Nuiqsut built and permitted, ConocoPhillips All pumps and other than contractual deliveries to Nuiqsut. did not ask the AOGCC for permission to related equipment hal In a March 31 letter to ConocoPhillips' make those deliveries until late 2006. North Slope operations manager, AOGCC According to Seamount's letter, the indi- • Seepex Progressive Cavity • Weir Noway Turbine Pumps Chairman Dan Seamount said records sug- cation that ConocoPhillips made early and • Lutz -Jesco Chemical Injection • API Pumps gest ConocoPhillips began taking o that al excessive deliveries came from the compa- • Versamatic Air Diaphragm Pumps • INPRO Seals gas from the Colville River field before fore that ny's monthly Form 10 -422, also known as a • Sulzer Process Pumps • Mechanical Seals February 2007 authorization, and also sug - ••Facility Report of Produced Gas • Gardner Denver Reciprocating • Complete Fabrication Packages gent the company has consistently taken off Disposition," where field operators list the • Zoeller & Mody Submersible Pumps • Electric Panels, Valves, Parts. more than its allowed 1 mmcf per day. amount of natural gas sold re- injected, Seamount declined to answer specific flared or used at every North Slope field and Phone: (907) 694 - 7583 Fax: (907) 694 - 7584 www.deltappump.com questions about the matter while it is under facility. P.O. Box 771452 • Eagle River • AK • 99577 investigation, but when asked generally about allowances, he said, "In general we According to a table compiled by the limit gas sales from oil fields because it is in AOGCC, ConocoPhillips began taking off the best interest of greater ultimate recov- natural gas from the Colville River field in Jan uary 2006, and has exceeded its 1 mmcf ConocoPhillips also declined to discuss daily average, often by 50 percent or more allegations, saying it would be "prema- m every month since then except August 11 Q / V j 1 G ri ( ALASKA 2008. �jn+ v rj1 Celebrating Thirty Years '' Customer Committed continued from page 5 authority would likely be limited to GEOTHERMAL instances where there was the likelihood of an unexpected encounter with oil or FX6 AND gas during the drilling of a geothermal RELIABLE - NO DODO 1 . require an AOGCC drilling permit for well. "`""°"' """' OmW1•""` ,on ' 5 s -04'1 any well with a total vertical depth Under SB 243, while DNR will con - ,.,,,,, ,,, ° ''A' P ,sw. «,w,�,.v.•,.,,cw•.aa.twst greater than 1,000 feet in specified town- tinue to oversee leasing, unitization and o••,,,, sduebv1 ha- wwe«/.-.4 snw∎mher1 ships and ranges within the Bristol Bay collection of royalties on geothermal w• tom •40 0,01104,11a4141105 I, Borough — the area where Naknek resources, the commission will regulate une {A.m. xr rn wananal Iwki namted to Nagle.: .0'° H lee,...to soso Electric was proposing to drill geother- the exploration and development of mal well. geothermal resources and waste of gent- + solutions finder. This was based on analysis of previ- hermal resources. ous drilling on the Alaska Peninsula The commission will recoup the cost which showed wells within 70 miles of of oversight through its normal regula- " the proposed Naknek geothermal tory cost charge process and provide '" drilling had encountered oil and gas, and necessary regulations. • on advice from the Department of Law that since geothermal drilling authority x+ was vested in DNR, the commission's Conrocr xnsrn, Nelson rw "" 1 at znerson @pelrole„n,news con, - ! -. * i Since 1982 > ,, A LA A Allk ?' EEL CQ. l Full Line Steel and Aluminum Distributor Specialising in low temperature steel 1200 W. Dowling Rd. Anchorage, AK 99518 494+44 444 www-auUN.ats 5 1.800.4781553 (907) 561 -1188 (800a7 -0969 5704.0 n0,> .�. N we AIR A ,„ ..,..RaSUM ■ CA Thursday, October 2, 2008 . -5 Natural g as from i AI ne Field finaily a comes to Nuiqsut SAVINGS: Cost to heat opment. Alpine started pro - homes will be about duct in 2000. The move turned out to be a tenth of what it was. one of great foresight for Nuiq- sut. At the time, oil prices were By ERIC LIDJI only$20 a barrel. Today, prices Petroleum News are around $100. Villagers in the North Slope However, while Arco, now community of Nuiqsut could Conoco Phillips, agreed to pro - heat their homes with natural vide the gas, the village was gas this winter, more than a required to build the facilities decade after securing a supply to condition and distribute the from a nearby oil field. gas to homes and .buildings. The North Slope Borough The North Slope Borough recently completed testing the agreed to finance the $10 mil - Nuiqsut Natural Gas Pipeline lion pipeline project, raising and expects to bring the 14- money by selling bonds and mile line into operation soon. getting a grant from the Na- Contractors hope to begin con- tional Petroleum Reserve - verting boilers for the commu- Alaska impact fund. nity of about 375 as soon as The borough planned to Oct. 13, although villagers can start construction toward the pay to switch over sooner. end of the 1990s. But the proj- The move to natural gas ect moved slowly as the bor- will dramatically lower heat- ough got permits, grants and ing costs • in Nuiqsut, where right -of -way leases. temperatures fall below freez- ing nearly 300 days each year. OVERCOMING OBSTACLES Nuiqsut currently pays the The borough received a highest heating costs on the certificate to operate as a pub - North Slope, where most com- lic utility in 2001. munities receive some form of By late 2004, officials with government subsidy. the Nuiqsut Natural Gas Pipe - Under the rates recently line said it had finished build - proposed to state regulators, ing the conditioning plant and customers would pay around some of the distribution facil- $1.79 per thousand cubic feet ities but still faced "delays in of gas from the pipeline. Gen - its gas supply contract negoti- erating the same amount from ations." Those delays, in part, heating oil would cost around forced the company to reapply $20.43, according to June pric- for state regulatory permis- es collected by the state. sion to operate the pipeline. Once the system becomes The borough faced further fully operational, Nuiqsut will delays as it worked with the j become the second North Alaska Oil and Gas Conserva- Slope community to generate tion Commission to obtain ap- heat from natural gas. Barrow, proval for meters allowing the the largest city in the borough, gas being removed from Al- uses a local supply of natural pine to be measured for pur- ; gas to heat its homes, busi- poses of paying the state its f nesses and public buildings. royalty. Early last year, the commission approved taking DEAL DATES TO THE 1990S 1 million cubic feet of natural The Nuiqsut Natural Gas gas from Alpine each day for Pipeline has been long in the Nuiqsut. j works. But the borough faced an- 1 The project dates back to other obstacle in May of last early development work at the year when the Regulatory Alpine oil field on the Colville Commission of Alaska deter- River near the village. The mined the project needed to be Alpine facilities sit on part of regulated as a common - carri- . 140,000 acres owned by Kuuk- er pipeline. pik Corp., the Native village The borough finally re- corporation for Nuiqsut. ceived a new certificate in Au- In the mid to late 1990s, gust 2007 to operate the pipe - Kuukpik signed a deal with line as a common carrier, and Arco Alaska Inc. letting the oil last month submitted its first company use its lands at Al- proposed tariff — or fee for pine in return for some of the shipping gas through the pipe - gas produced during oil devel- line. . . CONSERVATION ORDER NO. 579 o. . STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue, Suite 100 Anchorage Alaska 99501 RE: THE APPLICATION OF the North Slope Borough for an order granting a variance from the custody transfer equipment requirements of20 AAC 25.228 ) Conservation Order No. 579 ) Final Order ) Colville River Field ) Alpine Oil Pool ) Fiord Oil Pool ) Nanuq Oil Pool ) Nanuq-Kuparuk Oil Pool ) ) February 14,2007 IT APPEARING THAT: 1. By letter dated September 14, 2006, the North Slope Borough ("NSB") requested an order from the Alaska Oil and Gas Conservation Commission ("Commission") granting a variance from the requirements of 20 AAC 25.228 for custody transfer measurement equipment. 2. The Commission published notice of opportunity for a public hearing in the Journal of Commerce on October 22, 2006 and in The Arctic Sounder on October 19, 2006, pursuant to 20 AAC 25.540. 3. The Commission held a public hearing on November 28, 2006 at the Oil and Gas Conservation Commission, 333 W. 7th Avenue, Suite 100, Anchorage, Alaska. 4. By letter dated November 30, 2006, ConocoPhillips Alaska, Inc. ("CP AI") advised the Commission that they had further discussions with the NSB regarding the custody transfer metering for gas deliveries from the Alpine Field to the Nuiqsut Natural Gas Pipeline and that they had agreed to the installation of custody transfer meter(s) that would meet the requirements of20 AAC 25.228. 5. Conservation Order No. 579, dated December 21,2006, ordered CPAI and the NSB to submit the proposed plans for installation of custody transfer meter(s) to the Commission no later than January 16,2007. The Order also provided for the Department of Natural Resources, Division of Oil and Gas and the Department of Revenue, tax Division to have until the close of business on Monday January 22, 2007 to respond to the proposed plans submitted by CPAI and the NSB. 6. On January 16, 2007, CPAI and the NSB provided the Commission with a Custody Transfer Meter Installation Plan. 7. On January 22, 2007, the Department of Natural Resources, Division of Oil and Gas submitted its response to the proposed plan submitted by CP AI and the NSB. -e . FINDINGS: 1. ConocoPhillips Alaska, Inc. ("CP AI") is the operator of the Colville River Unit. 2. The NSB, working in conjunction with Kuukpik Corporation of Nuiqsut, the City of Nuiksut and CP AI, has installed a natural gas transportation and distribution system to carry natural gas from the Alpine production facility to the City of Nuiqsut. The NSB owns the gas processing module at Alpine and the transportation line between Alpine and the City ofNuiqsut. 3. The system design assumed that custody transfer and royalty measurement would take place upstream of the gas processing module. As a result the metering that was installed in the module does not comply with the requirements of20 AAC 25.228. 4. The Department of Natural Resources, Division of Oil and Gas, filed written comments proposing either (a) temporary use of the non-certified meters until custody transfer meters are installed or (b) pennanent use of the vortex meters and CP AI compensating the royalty owners for the vortex meter accuracy differentials under the royalty impact example set out on page three ofthe September 14, 2006 letter from the NSB. 5. The Department of Revenue, Tax Division, filed written comments proposing conditional approval of the vortex meters with certain conditions. 6. The NSB testified that the cost to replace the meters at $25,000 to $40,000 would far exceed the additional differential in royalty payments and would therefore be willing to pay an additional royalty differential. 7. Two days after the hearing, CPAI advised the Commission that they had further discussions with the NSB regarding the custody transfer metering for gas deliveries from the Alpine Field to the Nuiqsut Natural Gas Pipeline (''NNGP'') and that they had agreed to the installation of custody transfer meter(s) that would meet the requirements of 20 AAC 25.228. 8. On January 16, 2007, CPAI and the NSB filed a Custody Transfer Meter Installation Plan. CP AI and the NSB agreed to: a. Design and install a custody transfer orifice meter meeting the Petroleum Measurement Standards of the American Petroleum Institute as contemplated by 20 AAC 25.228. b. Design and install the custody transfer orifice meter with the location at the outlet ofthe gas conditioning skid in order to measure dry gas that enters the NNGP. 9. Because the expected project schedule for engineering, procurement and installation is approximately 15 weeks, CP AI and the NSB requested Commission approval for a temporary variance to cover the period between pipeline start-up and first shut-down, in the event that the custody transfer orifice meter installation does not meet the pipeline start-up schedule. In that event, the custody transfer orifice meter would be installed during the first shut-down of the NNGP, no later than summer 2007 during the Alpine Field's annual maintenance turnaround. Conservation Order No. 579 Page 2 of 4 Effective February 14,2007 . . 10. On January 22, 2007, the Department of Natural Resources, Division of Oil and Gas, filed their comments on the CP AI and NSB metering plan. They found the proposed meter installation plan acceptable and supported the temporary use of the non-certified vortex meters until the custody transfer meter is installed, so long as CP AI compensates the royalty owners for the vortex meter accuracy differential under the royalty impact example set out on page three of the September 14, 2006 letter ITom the NSB for the period that the variance is in effect. CONCLUSIONS: 1. The proposed custody transfer meter installation plan complies with the Commission's requirements in 20 AAC 25.228. 2. A temporary variance would permit pipeline start-up in the event that the custody transfer orifice meter installation does not meet the pipeline start-up schedule. 3. Neither the Department of Natural Resources, Division of Oil and Gas, nor the Department of Revenue, Tax Division, object to the temporary variance so long as any accuracy differential resulting ITom the less accurate vortex meter is added to the metered volume for calculating tax. and royalty volumes. NOW, THEREFORE, IT IS ORDERED THAT: 1. The Custody Transfer Meter Installation Plan submitted by CPAI and NSB meets the requirements of20 AAC 25.228. 2. In the event that the custody transfer orifice meter installation does not meet the pipeline start-up schedule, CP AI and NSB are granted a temporary variance so long as any accuracy differential resulting ITom the less accurate vortex meter is added to the metered volume for calculating tax. and royalty volumes. For the outlet vortex meter (Rosemount vortex meter model 8800C series) located immediately upstream of the pipeline, the monthly volume subject to tax. and royalty would equal the metered volume plus the metered volume multiplied by the meter accuracy differential of 1.35%. 3. At the request of CP AI and the NSB, the Commission may administratively amend the meter accuracy differential for purposes of calculating the metered volume subject to tax. and royalty if the Department of Revenue, Tax Division and the Department of Natural Resources, Division of Oil and Gas consent to the amendment. Conservation Order No. 579 Page 3 of 4 Effective February 14,2007 . . 4. CP AI must submit written notification to the Commission no later than September 17, 2007 confrrming its successful installation of the custody transfer orifice meter or provide the Commission with a detailed explanation and update on the plan to install the custody transfer meter. ~ DONE at Anchorage, Alaska and dated Feb J K. N~, Chainnan Alaska Oil and Gas Conservation Commission Ør~~ ~ Daniel T. Seamount, Jr., Commissioner Alaska Oil and Gas Conservation Commission I! j¡) ..í~/} ) ¡;YÚv¡ /í ~ éailly P.Joerster, Commissioner' Alaska Oil and Gas Conservation Commission AS 31.05.080 provides that within 20 days after receipt of written notice of the entry of an order, a person affected by it may file with the Commission an application for rehearing. A request for rehearing must be received by 4:30 PM on the 23m day following the date of the order, or next working day if a holiday or weekend, to be timely filed. The Commission shall grant or refuse the application in whole or in part within 10 days. The Commission can refuse an application by not acting on it within the lO-day period. An affected person has 30 days ftom the date the Commission refuses the application or mails (or otherwise distributes) an order upon rehearing, both being the final order of the Commission, to appeal the decision to Superior Court. Where a request for rehearing is denied by nonaction of the Commission, the 30-day period for appeal to Superior Court runs ftom the date on which the request is deemed denied (i.e., 101h day after the application for rehearing was filed). I certify that on February 15,2007 a copy Ofthe above was faxed and mailed to each Of the following at their addresses of record: Kevin Banks, Acting Director DNR Mike Kotowski, DNR, O&G Jon Iversen, Director DOR, Tax Division Teresa Imm, ASRC Stephen Landis, ConocoPhillips (Alaska), Inc. David Hodges, Project Manager, North Slope Borough Jerry Home, Anadarko Petroleum J9~Daniels, LCIyIF 4 ( \\ ("'''' ) . .(' -.......){ {C)l E)l¡Y\./ /'~ Jod~J.~olombie Sp~ Assistant to the Commission I Conservation Order No. 579 Page 4 of 4 Effective February 14,2007 . . STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue, Suite 100 Anchorage Alaska 99501 RE: THE APPLICATION OF the North Slope Borough for an order granting a variance from the custody transfer equipment requirements of20 AAC 25.228 ) Conservation Order No. 579 ) Final Order ) Colville River Field ) Alpine Oil Pool ) Fiord Oil Pool ) Nanuq Oil Pool ) Nanuq-Kuparuk Oil Pool ) ) February 14,2007 ORDER CLOSING DOCKET BY THE COMMISSION: The Commission has the closed the Docket in the above captioned matter. DATED AND EFFECTIVE at Anchorage, Alaska and this 14th day of February, 2007. BY DIRECTION OF THE COMMISSION 0~~ Jo J. Colombie S e ial Assistant to the Commission . Mary Jones XTO Energy, Inc. Cartography 810 Houston Street, Ste 2000 Ft. Worth, TX 76102-6298 George Vaught, Jr. PO Box 13557 Denver, CO 80201-3557 John Levorsen 200 North 3rd Street, #1202 Boise, 10 83702 Mark Wedman Halliburton 6900 Arctic Blvd. Anchorage, AK 99502 Ciri Land Department PO Box 93330 Anchorage, AK 99503 Gordon Severson 3201 Westmar Cr. Anchorage, AK 99508-4336 James Gibbs PO Box 1597 Soldotna, AK 99669 Richard Wagner PO Box 60868 Fairbanks, AK 99706 North Slope Borough PO Box 69 Barrow, AK 99723 David McCaleb IHS Energy Group GEPS 5333 Westheimer, Ste 100 Houston, TX 77056 Jerry Hodgden Hodgden Oil Company 408 18th Street Golden, CO 80401-2433 Kay Munger Munger Oil Information Service, Inc PO Box 45738 Los Angeles, CA 90045-0738 Schlumberger Drilling and Measurements 2525 Gambell Street #400 Anchorage, AK 99503 Ivan Gillian 9649 Musket Bell Cr.#5 Anchorage, AK 99507 Jack Hakkila PO Box 190083 Anchorage, AK 99519 Kenai National Wildlife Refuge Refuge Manager PO Box 2139 Soldotna, AK 99669-2139 Cliff Burglin PO Box 70131 Fairbanks, AK 99707 Williams Thomas Arctic Slope Regional Corporation Land Department PO Box 129 Barrow, AK 99723 . Mona Dickens Tesoro Refining and Marketing Co. Supply & Distribution 300 Concord Plaza Drive San Antonio, TX 78216 Richard Neahring NRG Associates President PO Box 1655 Colorado Springs, CO 80901 Michael Parks Marple's Business Newsletter 117 West Mercer St, Ste 200 Seattle, WA 98119-3960 Baker Oil Tools 4730 Business Park Blvd., #44 Anchorage, AK 99503 Jill Schneider US Geological Survey 4200 University Dr. Anchorage, AK 99508 Darwin Waldsmith PO Box 39309 Ninilchick, AK 99639 Penny Vadla 399 West Riverview Avenue Soldotna, AK 99669-7714 Bernie Karl K&K Recycling Inc. PO Box 58055 Fairbanks, AK 99711 ~J; µI, 01 ~I r¡ \l9, co 579 Colville River Field . . Subject: co 579 Colville River Field From: Jody Colombie <jody _ colombie@admin.state.ak.us> Date: Fri, 16 Feb 200711:20:35 -0900 To: undisclosed-recipients:; BCC: Cynthia B Mciver <bren_mciver@admin.state.ak.us>, Christine Hansen <c.hansen@iogcc.state.okus>, Terrie Hubble <hubbletl@bp.com>, Son<:lra Stewman <StewmaSD@BP.com>, stanekj <stanekj@unocal.com>, ecolaw <ecolaw@trustees.org>, trmjrI <trmjr I@ao1.com>, jdarlington <jdarlington@forestoi1.com>, nelson <knelson@petroleumnews.com>, cboddy <cboddy@usibelli.com>, Mark Dalton <markdalton@hdrinc.com>, Shannon Donnelly <shannon.donnelly@conocophillips.com>, "Mark P. Worcester" <markp.worcester@conocophillips.com>, Bob <bob@inletkeeper.org>, wdv <wdv@dnr.state.ak.us>, tjr <tjr@dnr.state.ak.us>, bbritch <bbritch@alaska.net>, mjnelson <mjnelson@purvingertz.com>, Charles O'Donnell <charles.o'donnell@veco.com>, "Randy L. Skillem"<SkiIleRL@BP.com>, "Deborah J. Jones" <JonesD6@BP.com>, "Steven R. Rossberg" <RossbeRS@BP.com>, Lois <lois@in1etkeeper.org>, Dan Bross <kuacnews@kuac.org>, Gordon Pospisil <PospisG@BP.com>, "Francis S. Sommer" <SommerFS@BP.com>, Mikel Schultz <Mike1.Schultz@BP.com>, "Nick W. Glover" <GloverNW@BP.com>, "Daryl J. Kleppin" <KleppiDE@BP.com>, "Janet D. Platt" <PlattJD@BP.com>, "Rosanne M. Jacobsen" <JacobsRM@BP.com>, ddonkel <ddonkel@cfl.rr.com>, mckay <mckay@gcLnet>, Barbara F Fullmer <barbara.f.fu1lmer@conocophillips.com>, Charles Barker <barker@usgs.gov>, doug_schultze <doug_schultze@xtoenergy.com>, Hank Alford <hank.alford@exxonmobi1.com>, Mark Kovac <yesno I@gcLnet>, gspfoff <gspfoff@aurorapower.com>, Gregg Nady <gregg.nady@shel1.com>, Fred Steece <fred.steece@state.sd.us>, rcrotty <rcrotty@ch2m.com>,jejones <jejones@aurorapower.com>, dapa <dapa@alaska.net>,jroderick <jroderick@gcLnet>, eyancy <eyancy@seal-tite.net>, "James M. Ruud" <james.m.ruud@conocophillips.com>, Brit Lively <mapalaska@ak.net>, jab <jah@dnr.state.ak.us>, buonoje <buonoje@bp.com>, Mark Hanley <mark_hanley@anadarko.com>, Julie Houle <julie_houle@dnr.state.ak.us>, John W Katz <jwkatz@alaskadc.org>, tablerk <tablerk@unocal.com>, Brady <brady@aoga.org>, Brian Havelock <beh@dnr.state.ak.us>, bpopp <bpopp@borough.kenaLak.us>, Jim White <jimwhite@satx.rr.com>, "John S. Haworth" <john.s.haworth@exxonmobi1.com>, marty <marty@rkindustrial.com>, ghammons <ghammons@ao1.com>, rmclean <rmclean@pobox.alaska.net>, mkm7200 <mkm7200@ao1.com>, Brian Gillespie <ifbmg@uaa.alaska.edu>, David L Boelens <dboelens@aurorapower.com>, Todd Durkee <TDURKEE@KMG.com>, Gary Schultz <gary_schultz@dnr.state.ak.us>, Wayne Rancier <RANCIER@petro-canada.ca>, Brandon Gagnon <bgagnon@brenalaw.com>, Paul Winslow <pmwinslow@forestoi1.com>, Sharmaine Copeland <copelasv@bp.com>, Kristin Dirks <kristin_dirks@dnr.state.ak.us>, Kaynell Zeman <kjzeman@marathonoi1.com>, John Tower <John.Tower@eia.doe.gov>, Bill Fowler <Bill_Fowler@anadarko.COM>, Scott Cranswick <scott.cranswick@mms.gov>, Brad McKim <mckimbs@BP.com>,jack newell <jacknewell@acsalaska.net>, James Scherr <james.scherr@mms.gov>, nI6I7@conocophillips.com, Tim Lawlor <Tim_Lawlor@ak.blm.gov>, Lynnda Kahn <Lynnda_Kahn@fws.gov>, Jerry Dethlefs <Jerry.C.Dethlefs@conocophillips.com>, crockett@aoga.org, Tamera Sheffield <sheffield@aoga.org>, Jon Goltz <Jon.Goltz@conocophillips.com>, Roger Belman <roger.belman@conocophillips.com>, Mindy Lewis <mlewis@brenalaw.com>, Kari Moriarty <moriarty@aoga.org>, Patty Alfaro <palfaro@yahoo.com>, Jeff <smetankaj@unocal.com>, Gary Rogers <garyJogers@revenue.state.ak.us>, Arthur Copoulos <Arthur_Copoulos@dnr.state.ak.us>, Ken <klyons@otsint1.com>, Steve Lambert <salambert@unocal.com>, Joe Nicks <news@radiokenai.com>, Jerry McCutcheon <susitnahydronow@yahoo.com>, Bill Walker <bill-wwa@ak.net>, Iris Matthews <Iris _ Matthews@legis.state.ak.us>, Paul Decker <paul_ decker@dnr.state.ak.us>, Aleutians East Borough lof2 2/16/200711:20 AM co 579 Colville River Field . . <admin@aleutianseast.org>, Marquerite kremer <marguerite_kremer@dnr.state.ak..us>, Mike Mason <mike@kbbLorg>,.Garland Robinson <gbrobinson@marathonoil.com>, Cammy Taylor <Camille_Taylor@law.state.ak..us>, Thomas E Maunder <tom_maunder@admin.state.ak..us>, Stephen F Davies <steve_davies@admin.state.ak..us>, Keith Wiles <kwiles@marathonoil.com>, Deanna Gamble <dgamble@kak.ivik.com>, James B Regg <jimJegg@admin.state.ak..us>, Catherine P Foerster <cathy_ foerster@admin.state.ak..us>, Bob <Bob@fairweather.com.>, gregory micallef <micallef@clearwire.net>, Laura Silliphant <laura_silliphant@dnr.state.ak..us>, David Steingreaber <david.e.steingreaber@exxonmobi1.com>, akpratts@acsalaska.net, Robert Campbell <Robert.Campbell@reuters.com>, Steve Moothart <steve_moothart@dnr.state.ak..us>, Anna Raff <anna.raff@dowjones.com>, Cliff Posey <cliff@posey.org>, Paul Bloom <paul_ bloom@m1.com>, Meghan Powell <Meghan.Powell@asrcenergy.com>, Temple Davidson <temple _davidson@dnr.state.ak..us>, Walter Featherly <WFeatherly@PattonBoggs.com>, Tricia Waggoner <twaggoner@nrginc.com>, Mike Stockinger <Mike.Stockinger@anadarko.com>, John Spain <jps@stateside.com>, Cody Rice <Cody_Rice@legis.state.ak..us>, John Garing <garingJD@bp.com.>, Harry Engel <engelhr@bp.com>, Jim Winegarner <jimwinegarner@brooksrangepetro.com>, Matt Rader <mattJader@dnr.state.ak..us>, carol smyth <carol.smyth@shel1.com>, Arthur C Saltmarsh <art _ saltmarsh@admin.state.ak..us>, Chris Gay <cdgay@marathonoil.com.>, foms@mtaonline.net, Rudy Brueggeman <rudy.brueggemann@intemational.gc.ca>, Cary Carrigan <cary@kfqd.com> Jody Colombie <iody colombie(tl¿admin.state.ak.us> Special Staff Assistant Alaska Oil and Gas Conservation Commission Department of Administration Content-Type: application/pdf co579 final.pdf . Content-Encodmg: base64 20f2 2/16/2007 11 :20 AM CO I Stephen R. Landis Operations Coordinator C onocoPhillips Post Office Box 100360 Anchorage, Alaska 99510 -0360 Alaska, Inc. Telephone 907- 265 -6454 November 30, 2007 John K. Norman via Fax (907) 276 -7542 and Hand a a Z `; r n Chairman Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue, Suite 100 Anchorage, Alaska 99501 ,. _ '11 is _ 31,3 Re: Nuiqsut Natural Gas Pipeline North Slope Borough Request for Consideration of Variance under 20 AAC 25.228 Dear Mr. Norman: The North Slope Borough ( "NSB ") and ConocoPhillips Alaska, Inc. ( "CPAI ") have had further discussions regarding the custody transfer metering for gas deliveries from the Alpine Field to the Nuiqsut Natural Gas Pipeline ( "NNGP "). The NSB and CPAI have agreed to the installation of custody transfer meter(s) meeting the Petroleum Measurement Standards of the American Petroleum Institute as contemplated by 20 AAC 25.228. These custody transfer meter(s) will either be installed upstream of the NSB's gas conditioning skid or at the outlet of the gas conditioning skid. Additional engineering and design work must be performed to determine which location will work best. It may or may not be possible to install the new custody transfer meter(s) prior to start-up of the NNGP. This is dependent on the start-up date. If start-up of the NNGP occurs as early as March 1, 2007, it is unlikely that the new custody transfer meter(s) can be installed before then. In that case the meter(s) would be installed during the first shutdown of the NNGP system. This is likely to occur no later than Summer 2007, during the Alpine Field's annual maintenance turnaround. If start-up of the NNGP occurs later than March 1, 2007, it is possible that the meter(s) can be installed prior to first gas deliveries. CPAI supports NSB's request for a variance, but on a temporary basis to cover the period between startup and first shutdown. The NSB has agreed to reimburse CPAI for any additional royalty payments resulting from meter uncertainty as proposed by the Division of Oil and Gas and the Department of Revenue in their November 27, 2006 comment letters. In any event, CPAI and the NSB will endeavor to install the new custody transfer meter(s) prior to startup. Very truly yours, Stephen R. Landis Operations Coordinator Colville River Unit c: David Hodges, NSB Camille' Oechsli Taylor, Assistant Attorney General 1117 · .StePhen R. Landis Operations Coordinator y ConocoPhillips Alaska, Inc. Post Office Box 100360 Anchorage, Alaska 99510-0360 Telephone 907-265-6454 August 21, 2007 John K. Norman Chairman Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue, Suite 100 Anchorage, Alaska 99501 via Fax (907) 276-7542 and Hand Delivery Re: Custody Transfer Meter Notification RECE\VED AUG 2 1 2007 Alaska Oil & Gas Cons. commiS$ion Anchorage .;.1 Dear Mr. Norman: In compliance with the AOGCC Conservation Order No. 579, Final Order of February 14, 2007, this written notification confirms that CP AI has successfully installed the custody transfer orifice meter per the submitted and approved plan. Pipeline startup has not yet occurred. Therefore, the temporary variance set forth in Conservation Order No. 579 was never used. Very truly yours, s~ f<. L Ó.t' 9-~ Stephen R. Landis Operations Coordinator Colville River Unit cc: Camille' Oechsli Taylor, Assistant Attorney General Jerry Home, Anadarko Petroleum Dave Hodges, North Slope Borough #16 RE: Nuitsut Metering . e Subject: RE: Nuitsut Metering From: "Landis, Stephen R." <Stephen.R.Landis@conocophillips.com> Date: Tue, 13 Feb 2007 09:56:20 -0900 To: Thomas Maunder <tom_maunder@admin.state.ak.us> CC: jdaniels@lcmf.com, "NSB - Hodges, Dave - North Slope Borough" <dave.hodges@north-slope.org> To be consistent with our submitted plan, the outlet vortex meter will be used for temporary measurement. It is a Rosemount vortex meter model 8800e series. It has a the following spec: Accuracy: Repeatability: +/- 1.35% +/- 0.1% '" SRL S. R. Landis Office: 907-265-6454 Cell: 907-748-1977 Fax: 907-265-1515 Emai1: stephen.r.landis@conocophillips.com -----Origina1 Message----- From: Thomas Maunder [mailto:tom maunder@admin.state.ak.us] Sent: Monday, February 12, 2007 11:20 AM To: Landis, Stephen R. Subject: Nuitsut Metering Steve, Just needed to check one item. If the orifice meter is not ready when start up is desired, which meter will be used for custody transfer? I don't have the drawing readily available at the moment. Cammy is drafting something and wishes to include the "extra factor". I know the meters vary and have different accuracies. on the drawing and maybe we can talk later Thanks, Tom Maunder, PE AOGCC I will try to lay my hands today. 10fl 2/13/2007 1:22 PM #15 @~&~~ (§Ia&~@jy}J DIVISION OF OIL AND GAS 550 WEST 7TH A VENUE, SUITE 800 ANCHORAGE, ALASKA 99501-3560 PHONE: (907) 269-8800 FAX: (907) 269-8938 DEPARTMENT OF NATURAL RESOURCES RECEIVED January 22,2007 J¡\N 2 4 2007 Alaska Oii & Gas Gons. C(}l11mission John K. Norman Chairman Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue, Suite 100 Anchorage, Alaska 99501 via Fax (907) 276-7542 and Mail Subject: Nuiqsut Natural Gas Pipeline Custody Transfer Meter Installation Plan Dear Mr. Norman: Reference is made to item Number 2· of the Alaska OiJ and Gas Conservation Commission's (AOGCC) Conservation Order No. 579, dated December 21 , 2006, and the ConocoPhillips Alaska, Inc. and North Slope Borough's custody transfer meter installation plan, dated January 11,2007. The Department of Natural Resources, Division of Oil and Gas (Division) finds the proposed meter installation plan acceptable. However, if the custody transfer meter installation does not meet the pipeline start-up schedule, the Division supports a temporary variance under the terms and conditions set out in its November 27, 2006 letter to the AOGCC. y'q$ ~ . ¿ ._/¡/ '" i/ vm R. B s Acting Director cc: Teresa Imm, ASRC Cammy Taylor, ADOL CRU_NuiqsutGas P/L_Meter-InstalIation Plan.doc "Develop, Conserve, and Enhance Natural Resources for Present and Future Alaskans. " _ ~AN-22~20Q-LMON....Q?:39 PM.OG ~ ~ Q: Q Q... ~ ....... 1-- ~ ~ 1-- 0:: o Q.. ~ -- I-- :2: ac:c ...... 0:: o ~ :; ....... ,......., ~ ~ '- Q:' o ~ :; - FAX NO'4IIIi698938 RECEIVED; Department of Natural Resource J.AN 2 2 2007 Division of Oil & Gas . 550 West 'f'- Avenue, Suite 800 Alaska 011 & Gas Cons. CQmmission Anchorage~ AK 99501-3560 Anchorage (907) 269-8800 State of Alaska ~~ _ ®rrn@@ü TO: ~MPMl.V: FROM: -:s- oL......... ..~ )J ðf -c ~ ... \.. ...." . ~Q~ c.G" t-"-:~~t. ~-t~~~k~ _ P.HONI;.: FAX NO.: PHONE~ fAX..~O.: .... J TI~.E: I ~ATE: ...' j'" I l~:? \.01.__ .. cc: Number of pages Including cover sheet: ~ o Urgent o For RevIew o Please Comment: /. . M~s8age: P. 01 '" " . "I'., q~7- ~7~" 7~,\~ ~ 1Þ."l~ ßa I ~ t. " I o As You Reque.ted AFYI _, ~~~'Co~~e'~_~ --t~ çp~i ~ ~S~\ ~r~~\~~ , \J \.ol~"t-t j( J;. V"'-.~-'(~r}" s.~ l\.n~.);", .~\.tl"'-) J..~-\ e.. ,,\ \\. \ C"T~. S:\Admln(Seç¡m::)\FolmS\Pax. cov \'a11l:r:I:I\Fax tbmJ.dac O:;J08IOS ...-.".., JAN-22-2007 MON 02:39 P~OG ®~l~] @j &1J®~ FAX N~4IíiIi698938 SARAH PAUN, GOVERNOR P. 02 DEPARTMENT OF NATURAL RESOURCES DIVISION OF OIL AND GAS 550 WEST 7TH A VENUE, SUITE 800 ANCHORAGE, ALASKA 99501·3560 PHONE: (907) 269-8800 FAX: (907) 269·8938 January 22, 2007 RECEIVED JAN 2 2 2007 Alaska Oil & Gas Cons. commission Anchorage John K. Norman Chairman Alaska Oil and Gas Conservation Commiss.ion 333 West Seventh Avenue, Suite 100 Anchorage, Alaska 99501 via Fax (907) 276-7542 and Mail Subject: Nuiqsut Natural Gas Pipeline Custody Transfer Meter Installation Plan . -, . .j.... .', I Dear Mr. Norman: I ~ : . , .) ',: Reference is made to ite.llJ. Number 2 of the Alaska Oil and Gas Conservation Commission's, (AOGCC) Con;:;ervation Order No. 579, dated December ,21, 2006, and the ConocoPhillips Alaska, Inc. and North Slope Borough's custody transfer meter installation plan, dated January 11,2007. The Depar1ment of Natural Resources, Division of Oil and Gas (Division) finds the proposed meter installation plan acceptable. However, if the custody transfer meter installation does not meet the pipeline start-up schedule, the Division supports a temporary variance under the tenns and conditions set out in its November 27, 2006 letter to the AOGCC. s~, ~Bhnks Acting Director cc: Teresa hnm., ASRC Cammy TayJor, ADOL CRU_NujqslItGus PIL_Meter-Installatíon Plan.doc "Deve.lop, Conserve, alld En/lance Natural Resollrce~Ior Presefl.t Q.1ld Future Alaskans. " #14 -- RECE\'JED J~,N '1 6 2007 I< 0·\ & Gas Cons CQmmìssíon Alas a I . Anchorage -- .~ ConocoPhillips Alaska,lnc. Stephen R. Landis Operations Coordinator Post Office Box 100360 Anchorage, Alaska 99610-0360 Telephone 907-265-6454 January 11, 2007 John K. Nonnan Chainnan Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue, Suite 100 Anchorage, Alaska 99501 via Fax (907) 276-7542 and Hand Delivery Re: Custody Transfer Meter Installation Plan Dear Mr. Nonnan: In compliance with the AOGCC order of December 21, 2006, the following proposed plan for installation ofNuiqsut Gas Pipeline custody transfer meter is submitted to the Commission. The North Slope Borough ("NSB") and ConocoPhillips Alaska, Inc. ("CPAI") plan to: 1. Design and install a custody transfer orifice meter meeting the Petroleum Measurement Standards of the American Petroleum Institute as contemplated by 20 AAC 25.228. 2. Design and install the custody transfer orifice meter with the location at the outlet of the gas conditioning skid in order to measure the dry gas that enters the Nuiqsut Gas Pipeline. 3. The expected project schedule including engineering, procurement and installation will be approximately 15 weeks from Commission approval of this plan. 4. If the custody transfer orifice meter installation does not meet the pipeline start-up schedule, CPAI supports NSB's request for a variance, but on a temporary basis to cover the period between pipeline start- up and first shutdown. JI Very truly yours, ~ ~ .Lo.-ili s. . Stephen R. Landis \b/JIM!1.'OC·t Operations Coordinator Operations Coordinator David Project Manager North Slope cc: Camille' Oechsli Taylor. Assistant Attorney General Jerry Home, Anadarko Petroleum #13 . . STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue, Suite 100 Anchorage Alaska 99501 RE: THE APPLICATION OF the North Slope ) Borough for an order granting a variance ) from the custody transfer equipment ) requirements of20 AAC 25.228 ) ) ) ) ) ) IT APPEARING THAT: Conservation Order No. 579 Colville River Field Alpine Oil Pool Fiord Oil Pool Nanuq Oil Pool Nanuq-Kuparuk Oil Pool December 21, 2006 1. By letter dated September 14,2006, the North Slope Borough ("NSB") requested an order from the Alaska Oil and Gas Conservation Commission ("Commission") granting a variance from the requirements of20 AAC 25.228 for custody transfer measurement equipment. 2. The Commission published notice of opportunity for a public hearing in the Journal of Commerce on October 22, 2006 and in The Arctic Sounder on October 19,2006, pursuant to 20 AAC 25.540. 3. The Commission held a public hearing on November 28,2006 at the Oil and Gas Conservation Commission, 333 W. 7th Avenue, Suite 100, Anchorage, Alaska. FINDINGS: 1. ConocoPhillips Alaska, Inc. ("CP AI") is the operator of the Colville River Unit. 2. The NSB, working in conjunction with Kuukpik Corporation ofNuiqsut, the City of Nuiksut and CP AI, has installed a natural gas transportation and distribution system to carry natural gas from the Alpine production facility to the City of Nuiqsut. The NSB owns the gas processing module at Alpine and the transportation line between Alpine and the City ofNuiqsut. 3. The system design assumed that custody transfer and royalty measurement would take place upstream of the gas processing module. As a result the metering that was installed in the module does not comply with the requirements of 20 AAC 25.228. . . 4. The Department of Natural Resources, Division of Oil and Gas, filed written comments proposing either (a) temporary use of the non-certified meters until custody transfer meters are installed or (b) permanent use of the vortex meters and CP AI compensating the royalty owners for the vortex meter accuracy differentials under the royalty impact example set out on page three of the September 14,2006 letter from the NSB. 5. The Department of Revenue, Tax Division, filed written comments proposing conditional approval of the vortex meters with certain conditions. 6. The NSB testified that the cost to replace the meters at $25,000 to $40,000 would far exceed the additional differential in royalty payments and would therefore be willing to pay an additional royalty differential. 7. Michael Erwin testified that CP AI, as operator of the Colville River Unit, took no position on the NSB' s request for the meter variance. 8. The Commission left the record open for 48 hours and asked the Department of Natural Resources, Division of Oil and Gas, to respond to the Department of Revenue, Tax Division's written comments. 9. On November 29, the NSB submitted additional information requested by the Commission during the hearing. 10. By letter dated November 30, 2006, CP AI advised the Commission that they had further discussions with the NSB regarding the custody transfer metering for gas deliveries from the Alpine Field to the Nuiqsut Natural Gas Pipeline and that they had agreed to the installation of custody transfer meter(s) that would meet the requirements of 20 AAC 25.228. Because additional engineering and design work needs to be performed, CP AI had yet to determine which location will work best. CONCLUSIONS: 1. Circumstances have changed since the hearing and it is appropriate for the Commission to review CPAI' s proposed plans for installation of the custody transfer meter(s) prior to making a decision on the pending NSB request for a meter variance. NOW, THEREFORE, IT IS ORDERED THAT: 1. CP AI and NSB must submit their proposed plans for installation of custody transfer meter( s) to the Commission no later than close of business on Monday January 16,2007. . , . 2. The Department of Natural Resources, Division of Oil and Gas and the Department of Revenue, tax Division will have until the close of business on Monday January 22, 2007 to respond to the proposed plans submitted by CP AI and the NSB. DONE at Anchorage, Alaska and dated q¿ Daniel T. Se ount, Jr., Commissioner Alaska Oil and Gas Conservation Commission AS 31'.05.080 providès that within 20 days after receipt of written notice of the en1ry of an order, a person affected by it may file with the Commission an application for rehearing. A request for rehearing must be received by 4:30 PM on the 23111 day following the date of the order, or next working day if a holiday or weekend, to be timely filed. The Commission shall grant or refuse the application in whole or in part within 10 days. The Commission can refuse an application by not acting on it within the 10-day period. An affected person has 30 days from the date the Commission refuses the application or mails (or otherwise distributes) an order upon rehearing, both being the final order of the Commission, to appeal the decision to Superior Court. Where a request for rehearing is denied by nonaction of the Commission, the 30-day period for appeal to Superior Court runs from the date on which the request is deemed denied (i.e., 10th day after the application for rehearing was filed). co 579 Colville River Field . . Subject: co 579 Colville River Field From: Jody Colombie <jody _ colombie@admin.state.ak.us> Date: Tue, 26 Dec 2006 13:43:58 -0900 To: undisclosed-recipients:; BCC: Cynthia B Mciver <bren_mciver@admin.state.ak.us>, Christine Hansen <c.hansen@iogcc.state.okus>, Terrie Hubble <hubblet1@bp.com>, Sondra Stewman <StewmaSD@BP.com>, stanekj <stanekj@unocal.com>, ecolaw <ecolaw@trustees.org>, trmjrI <trmjrI@ao1.com>, jdarlington <jdarlington@forestoil.com>, nelson <knelson@petroleumnews.com>, cboddy <cboddy@usibelli.com>, Mark Dalton <markdalton@hdrinc.com>, Shannon Donnelly <shannon.donnelly@conocophillips.com>, "Mark P . Worcester" <markp.worcester@conocophillips.com>, Bob <bob@inletkeeper.org>, wdv <wdv@dnr.state.ak.us>, tjr <tjr@dnr.state.ak.us>, bbritch <bbritch@alaska.net>, mjnelson <mjnelson@purvingertz.com>, Charles O'Donnell <charles.o'donnell@veco.com>, "Randy L. Skillern" <SkilleRL@BP.com>, "Deborah J. Jones" <JonesD6@BP.com>, "Steven R. Rossberg" <RossbeRS@BP.com>, Lois <lois@inletkeeper.org>, Dan Bross <kuacnews@kuac.org>, Gordon Pospisil <PospisG@BP.com>, "Francis S. Sommer" <SommerFS@BP.com>, Mikel Schultz <Mike1.Schultz@BP.com>, "Nick W. Glover" <GloverNW@BP.com>, "Daryl J. Kleppin" <KleppiDE@BP.com>, "JanetD. Platt" <PlattJD@BP.com>, "Rosanne M. Jacobsen" <JacobsRM@BP.com>, ddonkel <ddonkel@cfl.rr.com>, mckay <mckay@gcLnet>, Barbara F Fullmer <barbara.f.fullmer@conocophillips.com>, Charles Barker <barker@usgs.gov>, doug_schultze <doug_schultze@xtoenergy.com>, Hank Alford <hank.alford@exxonmobil.com>, Mark Kovac <yesno I@gcLnet>, gspfoff <gspfoff@aurorapower.com>, Gregg Nady <gregg.nady@shell.com>, Fred Steece <fred.steece@state.sd.us>, rcrotty <rcrotty@ch2m.com>, jejones <jejones@aurorapower.com>, dapa <dapa@alaska.net>, jroderick <jroderick@gci.net>, eyancy <eyancy@seal-tite.net>, "James M. Ruud" <james.m.ruud@conocophillips.com>, Brit Lively <mapalaska@ak.net>,jah <jah@dnr.state.ak.us>, buonoje <buonoje@bp.com>, Mark Hanley <mark _ hanley@anadarko.com>, Julie Houle <julie_houle@dnr.state.ak.us>, John W Katz <jwkatz@sso.org>, tablerk <tablerk@unocal.com>, Brady <brady@aoga.org>, Brian Havelock <beh@dnr.state.ak.us>, bpopp <bpopp@borough.kenai.ak.us>, Jim White <jimwhite@satx.rr.com>, "John S. Haworth" <john.s.haworth@exxonmobi1.com>, marty <marty@rkindustrial.com>, ghammons <ghammons@aol.com>, rmclean <rmclean@pobox.alaska.net>, mkm7200 <mkm7200@aol.com>, Brian Gillespie <ifbmg@uaa.alaska.edu>, David L Boelens <dboelens@aurol'apower.com>, Todd Durkee <TDURKEE@KMG.com>, Gary Schultz <gary _schultz@dnr.state.ak.us>, Wayne Rancier <RANCIER@petro-canada.ca>, Brandon Gagnon <bgagnon@brenalaw.com>, Paul Winslow <pmwinslow@forestoi1.com>, Sharmaine Copeland <copelasv@bp.com>, Kristin Dirks <kristin_dirks@dnr.state.ak.us>, Kaynell Zeman <kjzeman@marathonoil.com>, John Tower <John.Tower@eia.doe.gov>, Bill Fowler <Bill_Fowler@anadarko.COM>, Scott Cranswick <scott.cranswick@mms.gov>, Brad McKim <mckimbs@BP.com>, Steve Lambe <Iambes@unocal.com>, jack newell <jacknewell@acsalaska.net>, James Scherr <james.scherr@m.ms.gov>, n16I7@conocophillips.com, Tim Lawlor <Tim_LawIor@ak.blm.gov>, Lynnda Kahn <Lynnda_Kahn@fws.gov>, Jerry Dethlefs <Jerry.C.Dethlefs@conocophillips.com>, crockett@aoga.org, Tamera Sheffield <sheffield@aoga.org>, Jon Goltz <Jon.Goltz@conocophillips.com>, Roger Belman <roger.belman@conocophillips.com>, Mindy Lewis <mIewis@brenalaw.com>, Kari Moriarty <moriarty@aoga.org>, Patty Alfaro <palfaro@yahoo.com>, Jeff <smetankaj@unocal.com>, Gary Rogers <gary _rogers@revenue.state.ak.us>, Arthur Copoulos <Arthur_ Copoulos@dnr.state.ak.us>, Ken <ken@secorp-inc.com>, Steve Lambert <salambert@unocal.com>, Joe Nicks <news@radiokenai.com>, Jerry McCutcheon <susitnahydronow@yahoo.com>, Bill Walker <bill-wwa@ak.net>, Iris Matthews <Iris_Matthews@legis.state.ak.us>, Paul Decker <paul_decker@dnr.state.ak.us>, Aleutians East Borough 1of2 12/26/2006 1 :44 PM co 579 Colville River Field . . <admin@aleutianseast.org>, Marquerite kremer <marguerite _ kremer@dnr.state.ak.us>, Mike Mason <mike@kbbi.org>, Garland Robinson <gbrobinson@marathonoi1.com>, Cammy Taylor <Camille _ Taylor@law.state.ak.us>, Winton G Aubert <winton _ aubert@admin.state.ak.us>, Thomas E Maunder <tom_maunder@admin.state.ak.us>, Stephen F Davies <steve_davies@admin.state.ak.us>, Keith Wiles <kwiles@marathonoi1.com>, Deanna Gamble <dgamble@kakivik.com>, James B Regg <jimJegg@admin.state.ak.us>, Catherine P Foerster <cathy _foerster@admin.state.ak.us>, Bob <Bob@fairweather.com>, gregory micallef <micallef@c1earwire.net>, Laura Silliphant <laura _ silliphant@dnr.state.ak.us>, David Steingreaber <david.e.steingreaber@exxonmobi1.com>, akpratts@acsalaska.net, Robert Campbell <Robert.Campbell@reuters.com>, Steve Moothart <steve _ moothart@dnr.state.ak.us>, Anna Raff <anna.raff@dowjones.com>, Cliff Posey <c1iff@posey.org>, Paul Bloom <paul_bIoom@m1.com>, Meghan Powell <Meghan.Powell@asrcenergy.com>, Temple Davidson <temple_davidson@dnr.state.ak.us>, Walter Featherly <WFeatherly@PattonBoggs.com>, Tricia Waggoner <twaggoner@nrginc.com>, Mike Stockinger <Mike.Stockinger@anadarko.com>, , John Spain <jps@stateside.com> Jody Colombie <:iody colombie(à¿admin.state.ak.us> Special Staff Assistant Alaska Oil and Gas Conservation Commission Department of Administration Content-Type: applicationlpdf co579.pdf . Content-EncodlDg: base64 20f2 12/26/20061:44 PM Mary Jones XTO Energy, Inc. Cartography 810 Houston Street, Ste 2000 Ft. Worth, TX 76102-6298 George Vaught, Jr. PO Box 13557 Denver, CO 80201-3557 John Levorsen 200 North 3rd Street, #1202 Boise, ID 83702 Mark Wedman Halliburton 6900 Arctic Blvd. Anchorage, AK 99502 Ciri Land Department PO Box 93330 Anchorage, AK 99503 Gordon Severson 3201 Westmar Cr. Anchorage, AK 99508-4336 James Gibbs PO Box 1597 SOldotna, AK 99669 Richard Wagner PO Box 60868 Fairbanks, AK 99706 North Slope Borough PO Box 69 Barrow, AK 99723 . David McCaleb IHS Energy Group GEPS 5333 Westheimer, Ste 100 Houston, TX 77056 Jerry Hodgden Hodgiden Oil Company 408 118th Street Gold.~n, CO 80401-2433 Kay Munger Mun~ler Oil Information Service, Inc PO Box 45738 Los )\ngeles, CA 90045-0738 SchlLlmberger Drilling and Measurements 2525 Gambell Street #400 Anchorage, AK 99503 Ivan !Gillian 9649 Musket Bell Cr.#5 Anchorage, AK 99507 Jack Hakkila PO Box 190083 Ancho~ge,AK 99519 Kenai National Wildlife Refuge Refune Manager PO Box 2139 Soldc.tna, AK 99669-2139 Cliff Burglin PO Box 70131 Fairb:anks, AK 99707 Williams Thomas Arctic: Slope Regional Corporation Land Department PO Box 129 Barrow, AK 99723 . Mona Dickens Tesoro Refining and Marketing Co. Supply & Distribution 300 Concord Plaza Drive San Antonio, TX 78216 Richard Neahring NRG Associates President PO Box 1655 Colorado Springs, CO 80901 Michael Parks Marple's Business Newsletter 117 West Mercer St, Ste 200 Seattle, WA 98119-3960 Baker Oil Tools 4730 Business Park Blvd., #44 Ancho~ge, AK 99503 Jill Schneider US Geological Survey 4200 University Dr. Anchorage, AK 99508 Darwin Waldsmith PO Box 39309 Ninilchick, AK 99639 Penny Vadla 399 West Riverview Avenue Soldotna, AK 99669-7714 Bemie Karl K&K Recycling Inc. PO Box 58055 Fairbanks, AK 99711 ~~\\0~1 all \1\ #12 #11 . ~~~~>~ @j ~~~~~~ DEPARTMENT OF REVENUE Tax ~ivision Mr. John K. Norman, Chairman Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Suite 100 Anchorage, Alaska 99501 . FRANK MURKOWSKI, GOVERNOR o State Office Building PO Box 110420 Juneau, AK 99811-0420 907.465.2320 ŒI 550 W Seventh, Suite 500 Anchorage, AK 99501-3566 907.269.6620 www.tax.state.ak.us November 30, 2006 RECEIVED DEC 0 1 2006 Alaska Oil & Gas Cons. Commission Anchorage Subj: Follow up to Comments on Hearing for gas metering, proposed gas delivery from Colville River Unit to Nuiqsut Dear Mr. Norman: The Tax Division, Department of Revenue, State of Alaska provided written comments dated November 27, 2006 to the Alaska Oil and Gas Conservation Commission concerning the use of certain gas metering equipment for proposed delivery of gas from the Colville River Unit to the City of Nuiqsut. To clarify our comments in condition (2) "Allow only residential use," meant only to exclude large, third-party industrial or commercial use of gas and not to exclude use of the gas by the City of Nuiqsut for power and heat for homes, schools, city facilities and local establishments. We further believe under the current configuration of the proposed supply of gas to Nuiqsut, there would be insufficient supply for any large, third- party industrial or commercial use. To clarify our comments in condition (5) we believe any measurement accuracy differential resulting from the less accurate vortex shedding meter be added to the metered volume for calculating tax and royalty volumes. We believe this is the same protection DNR is requesting. Sincerely, ~~ VW~~ Robynn J. Wilson Director #10 . . Conoc~illips Alaska, Inc. Stephen R. Landis Operations Coordinator Post Office Box 100360 Anchorage, Alaska 99510-0360 Telephone 907-265-6454 November 30, 2001 ~ 5 ~ John K. Nonnan Chainnan Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue, Suite 100 Anchorage, Alaska 99501 via Fax (907) 276-7542 and HandRt!-e>E IVE D NOV 3 0 ¿006 Re: Nuiqsut Natural Gas Pipeline North Slope Borough Request for Consideration of Variance under 20 AAC 25.228 Alaska Oil & Gas Cons. Commission Anchorage Dear Mr. Norman: The North Slope Borough ("NSB") and ConocoPhillips Alaska, Inc. ("CP AI") have had further discussions regarding the custody transfer metering for gas deliveries from the Alpine Field to the Nuiqsut Natural Gas Pipeline ("NNGP"). The NSB and CPAI have agreed to the installation of custody transfer meter(s) meeting the Petroleum Measurement Standards of the American Petroleum Institute as contemplated by 20 AAC 25.228. These custody transfer meter(s) will either be installed upstream of the NSB's gas conditioning skid or at the outlet of the gas conditioning skid. Additional engineering and design work must be perfonned to detennine which location will work best. It mayor may not be possible to install the new custody transfer meter(s) prior to start-up of the NNGP. This is dependent on the start-up date. If start-up of the NNGP occurs as early as March 1, 2007, it is unlikely that the new custody transfer meter( s) can be installed before then. In that case the meter( s) would be installed during the first shutdown of the NNGP system. This is likely to occur no later than Summer 2007, during the Alpine Field's annual maintenance turnaround. If start-up of the NNGP occurs later than March 1, 2007, it is possible that the meter(s) can be installed prior to first gas deliveries. CP AI supports NSB' s request for a variance, but on a temporary basis to cover the period between startup and first shutdown. The NSB has agreed to reimburse CP AI for any additional royalty payments resulting from meter uncertainty as proposed by the Division of Oil and Gas and the Department of Revenue in their November 27,2006 comment letters. In any event, CP AI and the NSB will endeavor to install the new custody transfer meter(s) prior to startup. Very truly yours, S 't ~ --R. L,^--~ ~ Stephen R. Landis Operations Coordinator Colville River Unit c: David Hodges, NSB Camille' Oechsli Taylor, Assistant Attorney General #9 Re: NSB's Request for Consideration of Variance under 20 AAC 25.22... . . Subject: Re: NSB's Request for Consideration of Variance under 20 AAC 25.228 for the Nuiqsut Natural Gas Pipeline From: John Norman <john _ norman@admin.state.ak.us> Date: Wed, 29 Nov 200617:24:30 -0900 To: mike_kotowski@dnr.state.ak.us CC: Cammy Taylor <cammy_taylor@law.state.ak.us>, Jody Colombie <jody _ coIombie@admin.state.ak.us>, Thomas Maunder <tom _ maunder@admin.state.ak.us>, Steve Landis <Stephen.r.1andis@conocophillips.com>, Gary Rogers <gary _rogers@revenue.state.ak.us>, David S Roby <dave_roby@admin.state.ak.us>, Jody J Colombie <jody_colombie@admin.state.ak.us> Thank you Mike-receipt of your e-mail and the information contained therein is hereby acknowledged. John Mike Kotowski wrote: John, At the Tuesday Hearing, you requested that the Division comment on Item #5 of ADOR's November 27, 2006 Letter to the Commission regarding the Nuiqsut Gas Pipeline custody transfer metering issue. After re-reading the ADOR letter and talking with Gary Rogers of the ADOR Tax Division, it appears to me that the intent of ADOR's proposed condition # 5 is similar to the Division's proposal to compensate the royalty owners for the vortex meter accuracy differentials. A similar procedure, as set forth on page three of the September 14, 2006 NSB letter, would be applied to the production tax calculation to compensate the "tax-man" for the meter accuracy differentials. So, in the ADOR letter example, to compensate or "make-whole" the tax-man, the monthly volume subject to tax would equal the metered volume plus the metered volume multiplied by the meter accuracy differential. If you have any further questions, please let me know. My phone number is 269-8812. Mike Kotowski John K. Norman <John Norman(ci¿admin.state.us> Chairman Alaska Oil & Gas Conservation Commission 1 of 1 11/30/2006 9:22 AM #8 . NORTH SLOPE BOROUGH DEPARTMENT OF CAPITAL IMPROVEMENT PROGRAM MANAGEMENT 3000 est., Suite N201 Anchorage AK, 99503 Phone: (907) 561-6605 Fax: (907) 561-0112 November 29,2006 Mr. John K. Norman Commissioner Alaska Oil and Gas Conservation Commission 333 West 7th Ave., Suite 100 Anchorage, Alaska 99501 . NOV 2 9 2006 . Alaska Oli 6. Cons. Commission ~.' Anchorage .'. Re: Nuiqsut Natural Gas Pipeline Supplemental Submission for Request for Consideration of Variance under 20 AAC 25.228b Dear Mr. Norman: Attached is information concerning the Nuiqsut Natural Gas Pipeline requested during the Commission Hearing of November 28. This information consists of: . North Slope Borough Application to the Regulatory Commission of Alaska for a Certificate of Public Convenience and Necessity for the Nuiqsut Natural Gas System (in electronic format). . 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JOODI NPT A-5.3 INSTRUMENT AI~ CUSTÓIIER NANACOLT ENGINEERING LLC G TrI\.[ PIPING LAYOUT - ISOMETRIC VIEW CONDITIONAL MODULE ALPINE FACILITIES N'I'II<MD I~ NTS to. NO. UNIT NO. "~3.11.23 NO. R[Q'iRA~;fš4-02_001 Is;"o~s AE>1s2"" I 11 """WI< DC 10 NORTH SLOe BOROUGH DEPARTMENT OF CAPITAL IMPROVEMENT PROGRAM MANAGEMENT 4141 B STREET, SUITE 308 . ANCHORAGE, ALASKA 99503 PHONE: (907) 561-6605 . FAX: (907) 561-0112 . 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'-. N~iq~ut Natural Gas Pipeline & D/stnbution System App/' t· RCA Ica Ion to October-November 2006 N~V'\ '-r'-''''._ - /)G,TÒ'~, ~ ~O' ,. . #7 . . 1 ALASKA OIL AND GAS CONSERVATION COMMISSION 2 Before Commissioners: John K. Norman, Chairman Daniel T. Seamount Cathy Foerster 3 4 In the Matter of the NORTH SLOPE 5 BOROUGH request for CONSIDERATION of METERING VARIANCE UNDER 20 AAC 25.228 6 for NUIQSUT NATURAL GAS PIPELINE, COLVILLE RIVER UNIT 7 8 ALASKA OIL and GAS CONSERVATION COMMISSION Anchorage, Alaska 9 10 November 28, 2006 9:00 o'clock a.m. 11 PUBLIC HEARING 12 BEFORE: John K. Norman, Chairman Daniel T. Seamount, Commissioner Cathy Foerster, Commissioner 13 14 15 16 17 18 19 20 21 22 23 24 25 R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 . . 1 TABLE OF CONTENTS 2 Opening remarks by Chairman Norman Testimony by David Hodges Testimony by Michael Erwin 03 06 21 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 . . 1 PRO C E E DIN G S 2 Tape 1 3 0015 4 (On record - 9:00 a.m.) 5 CHAIR NORMAN: Good morning. This is a hearing this 6 morning before the Alaska Oil and Gas Conservation Commission. 7 I'm John Norman, Chairman of the Commission. To my right is 8 Commissioner Dan Seamount, the geologic Commissioner and to my 9 left Commissioner Cathy Seamount (sic), the engineering 10 Commissioner. 11 COMMISSIONER SEAMOUNT: Forester. 12 CHAIR NORMAN: I'm sorry, Forester. Give me a minute, I'm 13 operating on automatic pilot. 14 (Off record conversation) 15 The record reflects that notice of the hearing was duly 16 published in the Anchorage Daily News and several other 17 newspapers, the Arctic Sounder and any persons desiring to 18 receive a copy of the notice and see the Commission's special 19 assistant. 20 The notice was filed by the North Slope Borough on 21 September 14th, 2006 and it requests a hearing to consider a 22 variance to allow the use of gas metering equipment with 23 measurement uncertainty greater than that provided in the 24 Commission's applicable regulations. Those applicable 25 regulations are found in Alaska Administrative Code at 20 AAC R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 3 . . 1 25.228, Subsection (j). 2 The Commission has set this hearing because the accuracy 3 of the proposed metering device does not on its face meet the 4 requirements of the cited regulation. 5 We've received comments from both the State of Alaska 6 Department of Natural Resources Division of Oil and Gas and 7 also the State of Alaska Department of Revenue Tax Division. 8 If any interested parties, other than those two agencies, have 9 not received a copy of these comments, if you will so indicate 10 by holding up your hand, we'll see that you get a copy if you 11 would like one. 12 Okay. The Chair sees no one asking for a copy of these 13 comments by the Department of Natural Resources and by the 14 Department of Revenue. 15 The Chair will probably read and summarize these briefly 16 into the record unless there are representatives of these 17 agencies here and we'll give them an opportunity to testify and 18 summarize what's stated in the letters. If they don't, than 19 for purposes of the record I will briefly summarize the points 20 made in these letters. 21 Is there a representative of the applicant present from 22 the North Slope Borough. 23 MR. HODGES: Yes. 24 CHAIR NORMAN: Could you come forward, please, sir. 25 Before we begin, just for a moment I want to ask Commissioner R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 4 . . 1 Seamount if he has anything to add to my introductory remarks? 2 COMMISSIONER SEAMOUNT: I have none, Mr. Chairman. 3 CHAIR NORMAN: Commissioner Foerster? 4 COMMISSIONER FOERSTER: No. 5 CHAIR NORMAN: Okay. This proceeding is conducted 6 according to the Commission's standard procedures for 7 conducting administrative hearings and that's in Section 540 of 8 the Commission's regulations. We ordinarily do not allow cross 9 examination. We will swear witnesses. 10 When you are sworn we will ask you to state your name, 11 your affiliation for the record and then it is necessary to 12 speak into both microphones in front of you. The reason being 13 that one of them activates the sound amplification system, the 14 other is for the benefit of the Court Reporter. If would be 16 appreciated if you could also spell your name unless the spelling is obvious and also if you use technical terms try to give as much help as you can to the Court Reporter who must capture this and get it down in the form of a transcript. Now, sir, would you raise your right hand? 15 17 18 19 20 (Oath Administered) 21 MR. HODGES: Yes. 22 CHAIR NORMAN: Would you please state your name for the 23 record? 24 MR. HODGES: My name is David Hodges, H-o-d-g-e-s. 25 CHAIR NORMAN: And your affiliation? R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 5 DEC-20-2006 02:26 PM . . P.01 1 MR. HODGES: ! work for the North Slope Borough Public ...... ,~,..... 2 3 Works Department, Capital Improvements Division. CHAIR NORMAN: And will you be testifying as an expert 4 witness or simply here speaking for the Borough? 5 MR. HODGES: On behalf of the Borough. I have technical 6 assistance from our engineer. 7 CHAIR NORMAN: Very well. Then please proceed. TESTIMONY Sy DAVID HODGES 8 9 MR. HODGES: Good morning, Members of the Commission. As 10 stated my name is David Hodges. I am a program manager for the 11 North Slope Borough Department of Public Works and I've been 12 the Program Manager of record for the Nuiqsut Natural Gas 13 Project since its inception in about 1997. And we are nearing 14 the point at which we are ready to commission the system and ....,......... 15 start providing gas to the Village of Nuiqsut which has been a 16 long sought dream of the community. 17 For years and years they've watched the flares from 18 Kuparuk and even further away burning natural gas while we're .19 importing fuel oil at three, four, five or even $6 a gallon. 20 This project offers them an opportunity to save quite a bit of 21 money on a monthly basis, but I think more importantly direct 22 use in a Native village on the Slope of the resources that have 23 been so beneficial to the state as a whole and this has been a 24 high profile project for quite some time. 25 The issue today is regarding metering at the Alpine pad. ...~,,_...' ~ & R t 0 U R T R E P 0 R T E R S a11 G STREET (907)277'0572/fax 274·8982 ANCHORAGE. ALASKA 99501 6 . . 1 In an agreement with ConocoPhillips negotiated over several 2 years we were allowed to place a gas processing skid on pad 3 that will allow us to treat the gas and dry it sufficiently so 4 that we can send it to the village with little or no concern 5 about liquid hydrocarbons arriving in the village. 6 And part of that process was design and purchase of a 7 premanufactured, processing module several years ago, that was 8 placed about two years ago, possibly two and a half. And as we 9 got ready to commission this system the -- it turns out the 10 metering that was selected at the time of engineering and put 11 in, does not quite meet the standard for accuracy provided in 12 state regulation. 13 So due to the cost of replacing those meters compared to 15 the actual cost of the variance in terms of royalty amount we are requesting a variance to leave those meters in place for the time being and allow us to get some idea of what we're 14 16 17 really talking about in terms of volumes. We have estimates, 18 but until we actually start using gas in the village we're a 19 little bit uncertain about what we're really talking about ln 20 terms of quantity. 21 We have prepared a worse case scenario of a maximum amount 22 of gas that we see us using in the village on any given winter 23 day which is roughly 400,000 cubic feet. The calculation here 24 is done at 500,000, however, when we treat the gas we loose 25 some volume and that volume is returned -- stays up-pad in the R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 7 . . 1 form of liquids which will be -- my understanding from 2 ConocoPhillips is that they will be reinjected for later use. 3 So in actuality we will never -- it does not appear that 4 we will approach 500,000 cubic feet per day, but even at that 5 we're talking about a dollar and change maximum variance and 6 our estimates are that we won't -- it's highly unlikely that an 7 average annual will even be half of that, so in terms of costs 8 it's relatively low and I think that's something that the 9 Borough can deal with. 10 So, in essence, that's what we're requesting and I'd be 11 happy to answer any questions if I can. 12 CHAIR NORMAN: Very well, thank you, Mr. Hodges. 13 Commissioner Seamount. 14 COMMISSIONER SEAMOUNT: Mr. Hodges, if -- you mentioned, 15 you know, the cost of changing the meters, who would bear the 16 cost of changing the meters if that were to be done? 17 MR. HODGES: At this time the Borough does own that 18 equipment. It is inside our module so it is the Borough's 19 responsibility to change that equipment if, indeed, we have to. 20 COMMISSIONER SEAMOUNT: Okay. I guess there aren't plans 21 now for replacing it in the future with a certified meter, is 22 that true? 23 MR. HODGES: I wouldn't say that. It -- I think it's our 24 preference, meaning the Borough, would be to look at the cost 25 of replacing that meter versus the annual cost of making up the R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 8 . . 1 difference. And our guess right now is somewhere between 25 2 and $40,000 to replace that meter and we're looking at maybe 3 150 to $250 a year in royalty difference. 4 COMMISSIONER FOERSTER: How much did you say for replacing 5 the meter, I'm..... 6 MR. HODGES: Somewhere between 25,000 and 40,000. It's-- 7 there's more then one meter involved and due to the -- just the 8 cost of money it is likely that we'd be better off with the 9 additional royalty. Now at some point there will be a regular 10 change out of that meter. Their life span is a given length 11 and at that time it would make sense to replace it with a meter 12 that does meet the standard. 13 COMMISSIONER SEAMOUNT: And then I've seen a number -- a 14 rate of 500 Mcf a day and you say the maximum would be 400 Mcf 15 a day and then another 100 Mcf returned to the field, is that 16 correct? 17 MR. HODGES: Yeah, those are estimates actually. 18 Depending on the gas that comes into the meter, how much liquid 19 hydrocarbons come out of the ground with that gas. When we dry 20 it to -- our pipeline is aboveground for a significant portion 21 of the line. We need to have gas that will not drop any 22 liquids down to about minus 60 so there's quite a bit of liquid 23 that comes out of that. Actually we're anticipating that it 24 will be more than 100,000 will fallout. 25 If we were to use 500,000 coming into the skid, we're R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 9 . . 1 actually -- our estimates are between 360 and 380,000 cubic 2 feet per day will actually leave the skid in our line. 3 COMMISSIONER SEAMOUNT: So the processing that the gas 4 goes through before it goes through -- goes to Nuiqsut is not 5 100 percent good, right, you're going to have to do some other 6 processing, dropping out some additional liquids and then 7 returning it by a separate line to the field or a return line? 8 MR. HODGES: They will all stay on the pad, yeah. Our 9 skid at Alpine.. ... 10 COMMISSIONER SEAMOUNT: Okay. 11 MR. HODGES: . . . . .does dry it to 60 below so we are -- 12 it's our anticipation that we will not have any liquids leave 13 the pad. They will all stay there. 14 Now, we do have safety features in Nuiqsut in case we do 15 get liquids down the line to deal with those, but if -- the 16 design intent is to make sure that those liquids do not leave 17 the pad. 18 COMMISSIONER SEAMOUNT: Okay, thank you, Mr. Hodges, I 19 have no further questions at this time. 20 CHAIR NORMAN: Commissioner Foerster. 21 COMMISSIONER FOERSTER: How did we get here? What -- how 22 did we get a meter in place that didn't meet the standards when 23 the standards have been there forever? 24 MR. HODGES: That's a question I've asked myself. I think 25 that there were -- at the time that this was engineered and R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 10 . . 1 that was four or five years ago, maybe even six when we began 2 design on that skid, I think there was -- we were in 3 negotiations first with ARCO and then Conoco call it, 4 ConocoPhillips, and I think there was some misunderstanding 5 about custody transfer point and responsibility for metering. 6 At the end of the day we bought meters that we considered 7 to be adequate for the job that we were going to have to do in 8 subsequent the results of some of our agreements which are 9 beneficial to the Borough in most regards. I think that that 10 meter, the one in question on the inlet side had already been 11 purchased so at that point it was either change it or go 12 through this process and based on cost we decided to go through 13 this process. 14 COMMISSIONER FOERSTER: Thank you. And when you said 15 leave the meter in for the time being, what you're referring to 16 there is until you convince yourself that the cost benefit 17 exists and until such time as you decide it's beneficial to 18 replace with a more accurate meter, is that what you mean by 19 the time being? 20 MR. HODGES: Yes, or the meter just wears out. If it 21 comes time for maintenance purposes, if that meter looses 22 accuracy, if it's no longer reliable and we need to change it 23 out at that time it would make sense to put in a meter 24 that..... 25 COMMISSIONER FOERSTER: The more accurate meter..... R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 11 . . 1 MR. HODGES: '" ..meets regulation. Yes. 2 COMMISSIONER FOERSTER: So I thought I heard that there 3 were plans to change the meter out periodically? 4 MR. HODGES: Yes, and at that time -- you know, if we do 5 have to change it due to it's served its useful life then it 6 would make sense to put in a qualifying meter. 7 COMMISSIONER FOERSTER: Okay, thank you. That's it. 8 CHAIR NORMAN: Okay. Mr. Hodges, could you briefly 9 clarify the Borough's role in this? I understand you're acting 10 as. . . . . 11 MR. HODGES: Yes. 12 CHAIR NORMAN: '" ..the local distributor in utilities, is 13 that correct? 14 MR. HODGES: That's correct. It's actually a fairly 15 complicated arrangement that will be beneficial to not only the 16 residents of Nuiqsut, but also the North Slope Borough. 17 Several years ago when Alpine was being considered for 18 construction ARCO and the local village corporation, Kuukpik 19 Corporation, which owns the surface rights in the area 20 negotiated an agreement, a surface use agreement. Part of the 21 compensation to the Corporation included a certain amount of 22 natural gas to be provided for use in the village. It was very 23 strict to use in the village. So that gas owned by Kuukpik at 24 the pad at Alpine, it was the responsibility of Kuukpik to get 25 that gas suitable for transportation and then transport it to R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 12 . . 1 Nuiqsut. Kuukpik came to the Borough and said we have gas. We'd 3 like to use it in the village. We would like it for the 2 4 benefit of our residents as well as the Borough, but there is 5 quite a bit of infrastructure that needs to be developed in 6 order to make the project work. 7 The Borough after doing analysis of costs, bringing in 8 fuel, storing fuel, transporting fuel within the village 9 determined that despite a rather high cost of infrastructure 10 that in the long run it would save a considerable amount of 11 money not only for the Borough, but also for the residents of 12 the village and remove a certain amount of concern about the 13 reliability of fuel delivers. 14 So we embarked on a process through our capital process of 15 designing and installing the infrastructure. There were a 16 number of grants through NPRA, lease funds that were also 17 that came from the state that were used to do quite a bit of 18 the development. 19 So at this point the Borough owns all of the 20 infrastructure from the gas processing module at Alpine, the 21 transportation line between Alpine and the village. That's 22 roughly eight miles aboveground, six miles below ground. We 23 share the vertical support members with the Alpine Oil Sales 24 Pipeline to the Colville River at which point we drop off the 25 VSMs where their line goes under the river back to Kuparuk and R & Reo U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 13 . . 1 we continue buried underground into Nuiqsut. 2 We have another module in Nuiqsut to reduce pressure and 3 capture any liquids that do happen to come down the line and 4 warm the temperature to a proper temperature to go into our 5 distribution system. We have a distribution throughout the 6 community. It's in place. And we have recently installed 7 generators at the power plant that are gas burning. So that is 8 the state of infrastructure at the moment. All of that 9 infrastructure is owned by the North Slope Borough. 10 We have an agreement, gas supply agreement between Kuukpik 11 and the local utility cooperative which the Village of Nuiqsut 12 has formed and the legal custody line is Kuukpik from 13 ConocoPhillips. Kuukpik then gives the gas to the utility 14 cooperative and it is an instantaneous pass through to the 15 North Slope Borough at that point. 16 So before the gas actually enters the module at Alpine it 17 goes through the transfers from ConocoPhillips to Kuukpik to 18 the utility cooperative to the North Slope Borough, but by the 19 time it goes into the module it is owned by the North Slope 20 Borough. And all of those transfers are at no cost other than 21 the initial -- it is compensation to Kuukpik for surface use, 22 the initial transfer. 23 So in reality the entire project is made possible by the 24 local Corporation giving an asset to the community, including 25 the Borough of 500,000 cubic feet per day. So once that gas is R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 14 . . 1 transported, goes through our distribution system, it goes to 2 the power plant. It's distributed to all the homes or will be. 3 We have not actually commissioned the system at this time. 4 We have funds in place that are available to provide 5 conversion of home heat systems, whether they're a furnace or a 6 boiler or whatever they might be to gas burning appliance. 7 Obviously we will not start doing those conversions until the 8 system has been proven reliable and is providing electricity 9 through the gas burning generators at the power plant. We're 10 anticipating that will happen later spring, early summer next 11 year where we will actually go into homes and starting 12 converting equipment. 13 We also have funds to convert Borough buildings, that is 14 Borough bond money and we will be converting virtually all 15 buildings. There are a couple that are not on the distribution 16 system at this time. In the future we may be able to expand 17 it. In buildings that have multiple boilers we will leave one 18 fuel oil boiler and put in one gas burning boiler so in case of 19 a problem with the gas system we can still heat those 20 facilities. 21 We will be offering free standing fuel oil burning stoves 22 for individual residents to install in their homes or we will 23 put them in for them at the time we do the conversion so in 24 case of a gas outage they will be able to heat their homes. 25 And in the power plant we are not removing any of the fuel R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 15 . . 1 oil generators. They will stay in place and they will be 2 regularly tested on fuel oil and the gas burning generators 3 will be used we're anticipating 95 percent of the time. And 4 for maintenance and in case of an outage we will still be able 5 to provide full electrical service to the community. So that's 6 essentially how the system is set up right now. 7 The tariff, which we have recently submitted to the RCA 8 includes only operating cost for the system. There will be no 9 cost for the fuel. So as a result the heating cost for 10 residents in the village and the cost of electricity will be 11 significantly lower than any other village on the Slope. And 12 part of our commitment to the Corporation and the utility 13 cooperative was that there -- we would pass on the gas at the 14 same cost which at this point is at zero cost to the community 15 and we would only be looking to recapture actual operational 16 costs in the rate. 17 So that is basically how the system works. It's a little 18 bit complicated, but it's the first time we've done it so we're 19 all learning as we go. 20 CHAIR NORMAN: You mentioned that Kuukpik had made this 21 gas available as part of its surface use agreement. They've 22 gotten the free gas. They've made it available. They've 23 brought the Borough in, would benefit the residents of the 24 village and the Borough. How does it benefit the Borough? 25 MR. HODGES: The North Slope Borough has had a program for R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 16 . . 1 a number of years now of purchasing fuel for the village, not just for use in Borough buildings or the power plant, but we also buy the fuel for home heat. It goes into the North Slope 2 3 4 Borough tank farm and at that point it is delivered to homes 5 through the village corporation. They have a service where 6 they have a fuel delivery service. The residents pay only the 7 cost of delivery of that fuel into their home. 8 So the Borough's cost of fuel will decrease dramatically 9 as we no longer pay for fuel. It costs us a couple of dollars 10 a gallon plus freight, plus the cost of storage, infrastructure 11 to store the fuel, caring for that infrastructure. Most of 12 that goes away. The cost of operating fuel. Oil boilers is 13 considerably higher than the cost of operating a gas boiler. 14 Their functional life is considerably longer. They're much 15 simpler. So over all the Borough stands to save quite a bit of 16 money changing from fuel oil to natural gas. 17 Often times our calculations when we -- when we consider 18 all aspects of our fuel system can be five and $6 a gallon. 19 The best scenario is when we can truck fuel in. Nuiqsut is the 20 only village where we can do that. There is an ice road most 21 winters and that is a village where our cost for fuel is 22 roughly equivalent to the barge fuel that comes into the 23 coastal villages. 24 Last year, for example, we were due for a regulatory 25 inspection of the inside of our fuel tanks. That has to be R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 17 . . 1 done in the summer. We had to empty the tanks. We could not 2 fill them through fuel delivered over the ice road and we had 3 to fly an entire years worth of fuel into Nuiqsut after the 4 inspections. That fuel cost us five or six or $7 a gallon. 5 And our cost for the same amount of energy in terms of gas 6 at our current tariff which is operational costs only will be a 7 few cents as opposed to five or $6 a gallon so there's a huge 8 savings for the Borough there. 9 CHAIR NORMAN: Have you had an opportunity to look at a 10 letter form the Department of Revenue dated November 27th? 11 MR. HODGES: That is one I don't have. I'm sorry I do 12 have one here from Natural Resources, . . . . . 13 CHAIR NORMAN: Okay. 14 MR. HODGES: .... .but the one you mentioned from Revenue 15 is not in my possession. 16 CHAIR NORMAN: Then what we'll do, we'll certainly make 17 sure that you get a copy of that. There are essentially 18 what the Department of Revenue is requesting is that if this 19 alternative form of metering is approved they're suggesting 20 that some conditions should be attached to that and I'll read 21 them briefly. 22 One of them is set a minimum -- or a monthly maximum 23 allowable flow that's double the anticipated rate of 300,000 24 Mcf 25 COMMISSIONER FOERSTER: Thirty..... R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 18 . . 1 CHAIR NORMAN: .... .or 30,000 Mcf, I'm sorry. 2 COMMISSIONER SEAMOUNT: Thirty million. 3 CHAIR NORMAN: Thirty million. The second is allow only 4 residential use. The third condition is require some level of 5 monitored regular meter proving or recalibration. The fourth 6 is require some form of meter redundancy and then the fifth 1S 7 to adjust for any error and require the producer to pay 8 production tax on the larger possible measurement uncertainty 9 error. 10 We'll get you that. Now, I won't ask you to comment on 11 that now until you have that in front of you, but I think 12 before we finish here the Commission would appreciate it, if 13 you feel comfortable doing so today, to have you comments on 14 these conditions. 15 MR. HODGES: Yeah. Yes, we would like to comment on 16 those. My only real concern there is the residential use. I'm 17 a little bit concerned by that because the gas will be used for 18 all users in Nuiqsut including the Borough and the Corporation, 19 there is a grocery store there. We have other commercial 20 users, the city, the church, the Post Office so it is not 21 strictly residential. It serves strictly the Community of 22 Nuiqsut, but it is not strictly residential service. 23 CHAIR NORMAN: Okay. Anything further, Commissioner 24 Seamount? 25 COMMISSIONER SEAMOUNT: I don't have anything further R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 19 . . 1 other than to comment that I'd like to thank you for a very 2 informative and valuable description of the project including 3 its infrastructure, economics and the benefits to the local 4 community, that answered a lot of my question right there. 5 MR. HODGES: I'd like to emphasize that the entire project 6 is made possible by Kuukpik Corporation. It is their offering 7 the gas to the community for free in return for their valuable 8 surface use rights that has made this project possible and 9 we're very grateful to the Corporation for that. 10 I'd also like to mention that I think at the time that 11 this agreement came into being a number of years ago that the 12 people in the room considering this potential transfer of gas 13 it appeared to be a rather simple solution to the energy needs 14 of the village and several of us have worked on the technical 15 side have found it to be somewhat more complicated, but we're 16 practically there now. 17 COMMISSIONER FOERSTER: You mentioned that it was your 18 expectation that the North Slope Borough would pay the 19 differential, the royalty differential? I just wanted to make 20 sure I understood that correct. 21 MR. HODGES: At this time ConocoPhillips has made it clear 22 that they don't see this issue as their responsibility and so 23 the Borough -- at this point we are very anxious to get the 24 project moving and we are willing to accept this. We're 25 talking about somewhere between 100 and $300 a year. We're R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 20 . . 1 certainly not going to allow that to stand between our current 2 system and the potential of the natural gas system. 3 COMMISSIONER FOERSTER: Thank you. 4 CHAIR NORMAN: Anything further? Okay. Well, thank you 5 very much. Mr. Hodges, if you wouldn't mind, if your schedule 6 permits and you could remain. . . . . 7 MR. HODGES: Yes. 8 CHAIR NORMAN: ... ..we might have to recall you for a 9 question. And if we do we would ask you to remember that when 10 you are recalled you would under Oath until we conclude these 11 proceedings. 12 MR. HODGES: Certainly. 13 CHAIR NORMAN: All right. Are there any other persons 14 here who wish to testify? 15 MR. ERWIN: Yes. 16 CHAIR NORMAN: Oh, I'm sorry, sir, please come forward. 17 Will you raise your right hand, please? 18 (Oath Administered) 19 MR. ERWIN: Yes, sir. 20 CHAIR NORMAN: And please state your name? 21 MR. ERWIN: Michael Erwin, E-r-w-i-n. 22 CHAIR NORMAN: And who do you represent? 23 MR. ERWIN: ConocoPhillips. CHAIR NORMAN: Very well. Please -- and will you be 24 25 testifying as an expert witness on the subject or simply as a R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 21 DEC-28-2886 82:28 PM . . P.81 1 spokesperson for the company on policy? 2 MR. ERWIN: A spokesperson for the company. CHAIR NORMAN: Very well, proceed. TESTIMONY BY MICHAEL .ERWIN 3 4 5 MR. ERWIN: Just a few comments. Certainly appreciate. 6 Dave's thorough explanation and background on the gas skid and 7 the work that's gone on in that area. 8 ConocoPhillips will be providing gas to the Village of 9 Nuiqsut. However, werre not responsible for proce~sing or 10 transporting it beyond the Alpine field as Dave so clearly 11 pointed out. 12 The North Slope Borough both designed and constructed the 13 gas skid to process and handle the gas which he also was very 14 good at describing. 15 conocoPhillips does operate -- we do operate the gas skid 16 on behalf of the North Slope Borough and that's our role in 17 this proceeding. And we recognize that while the North Slope 18 Borough's Vortex meters are roughly comparable to API custody 19 meter requirements, they do not result in equal or improved 20 accuracy and we recognize that. Therefore, as operator we take 21 no position on the North Slope Borough's request for the 22 variance. 23 And we have reviewed the Division of Oil and Gas comments 24 regarding that variance and we're unwilling to agree that in 25 the event that the variance is granted that we should ....,,,........ I!. & R C. Q U Roo'! . R....E. P. ..O...R .J. E R S 811 G STREET (907)277-0512/Pax 274·8982 ANCHORAijE. ALASKA 99501 22 . . 1 compensate the royalty owners for any meter accuracy 2 differentials. 3 Unless there are any questions there really wasn't 4 anything more that I had to -- needed to say. 5 CHAIR NORMAN: Very well, thank you. Commissioner 6 Seamount, questions? 7 COMMISSIONER SEAMOUNT: I have none. 8 CHAIR NORMAN: Commissioner Foerster? 9 COMMISSIONER FOERSTER: I have a couple. In all of your operations you're required to provide monthly gas disposition reporting for all gas that is used for. . . . . MR. ERWIN: Correct. 10 11 12 13 COMMISSIONER FOERSTER: ... ..any purpose. And I'm 14 wondering have you made preparations and plans to report these 15 volumes and could you describe that to me if you have? 16 MR. ERWIN: We have in fact been working on that now for 17 some time, going through to make sure that our gas accounting 18 methods will properly allocate the gas sent to the village back 19 across both the production from the Alpine field and from any 20 associated satellites that will feed into Alpine. 21 COMMISSIONER FOERSTER: And what category will you report 22 it to us as for our gas disposition 'cause there -- you know, 23 there are things like lease use and yeah, so..... 24 MR. ERWIN: It's my understanding this will be recorded as 25 gas sales. R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 23 . . 1 COMMISSIONER FOERSTER: As gas sales. So my follow up 2 question to that one, and you know this question's coming, have 3 you made plans to request a gas allowable offtake from the oil 4 fields that will be providing this gas? 5 MR. ERWIN: That was a new revelation and I'm not aware of 6 any ongoing work in that regards at this time. 7 CHAIR NORMAN: Mr. Phillips (sic), are there any 8 other..... 9 COMMISSIONER FOERSTER: Mr. Erwin. 10 CHAIR NORMAN: I'm sorry, Mr. Erwin. 11 COMMISSIONER SEAMOUNT: Mr. ConocoPhillips. 12 COMMISSIONER FOERSTER: He prefers to be called Mr. Arco, 13 I think. 14 CHAIR NORMAN: I need to have another cup of coffee this 15 morning. Mr. Erwin, are there any other financially interested 16 parties that should be heard by this Commission to your 17 knowledge? You're speaking for the operator ConocoPhillips and 18 with that you have authority for the others, owners of the 19 field, am I correct in that? 20 MR. ERWIN: That's my understanding, yes. We operate on 21 behalf of both ConocoPhillips and Anadarko Petroleum..... 22 CHAIR NORMAN: Yes. 23 MR. ERWIN: .... .who is not here present to speak on their 24 own behalf. 25 CHAIR NORMAN: Okay. R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 24 . . 1 COMMISSIONER SEAMOUNT: Should be take a recess? 2 CHAIR NORMAN: Let's see if just I'll ask you a 3 question. Thank you very much. And if you wouldn't mind 4 remaining we might -- I think we'll wrap this up fairly 5 quickly. 6 Any there any other persons here who wish to offer any 7 testimony on this matter? Are there any persons here who need 8 a copy of the written comments provided by the Division of Oil 9 and Gas or the Department of Revenue? Okay. The Chair sees no 10 one asking to be recognized. 11 We will take now approximately a 10 minute recess and then 12 we'll reconvene. 13 (Off record - 9:43 a.m.) 14 (On record - 10:02 a.m.) 15 CHAIR NORMAN: Okay. We're back on the record. The time 16 is approximately 10:00 a.m. The Commissioners have taken a 17 brief recess and this is a continuation of the hearing on the 18 application of the North Slope Borough related to gas metering 19 for sales to the Village of Nuiqsut -- or disposition 20 transferred to the Village of Nuiqsut. 21 Mr. Hodges, could you corne forward, please, again and take 22 your place at the microphones? And, sir, you again understand 23 you remain under Oath? 24 MR. HODGES: Yes. 25 CHAIR NORMAN: Okay. Have you had an opportunity to look R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 25 . . 1 at the November 27th letter from the Department of Revenue? 2 MR. HODGES: Yes, I have. 3 CHAIR NORMAN: Okay. And in that letter there are -- at 4 the bottom of the first page and then at the top of the second 5 page there are five proposed conditions should the Commission 6 grant this request and if you are able to do so now I would 7 like you to comment on those. If you need to think about them 8 further since you have just been provided this, that's 9 acceptable and we'll give you time to submit comments in 10 writing. 11 MR. HODGES: After review of these five conditions I think 12 we find all except number two to be acceptable and within for 13 the most part what we had anticipated in our original request. 14 And I think the issue there with item two allow only 15 residential use we may be able to clarify with the Department 16 of Revenue. It is the intention -- it always has been the 17 intention that this gas will serve only the Village of Nuiqsut, 18 but it's not strictly for residential use. It is all needs of 19 the Village. 20 In our tariff that we have submitted to RCA we have 21 multiple levels of users, residential, commercial which is 22 anybody that's already in the village that's not residential 23 and then anybody beyond that we would have a special contract. 24 They would not get the same rate. 25 We don't know how this might effect future development ln R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 26 . . 1 the village. The village is interested in some level of 2 commercial development for the benefit of the Corporation and 3 their shareholders which are 98 percent of the village 4 residents, but it is not the intention of the Borough or the 5 Corporation that this gas be used for other than the benefit of 6 the village directly. They're not anticipating a massive 7 commercial development there and we -- I believe we have taken 8 that into account in the tariff. 9 And if this can be clarified for use of the village rather 10 than residential only, I think that that would be acceptable, 11 that would be along the lines that we have always anticipated 12 for use of the gas. 13 CHAIR NORMAN: A somewhat related question, does the 14 Surface Use Agreement specify any maximum offtake volume for 15 use of the village? 16 MR. HODGES: Yes, it does. The initial amount was 500,000 17 cubic feet per day, that's before processing and at such time 18 as a satellite field -- certain satellite fields came on line 19 at Alpine there would be an additional 500,000 for a total of a 20 million. And Mike can correct me if I'm wrong, but I believe 21 the satellite field is now in production that would qualify so 22 the Corporation is entitled to a maximum of one million cubic 23 feet per day and we're anticipating use far below that for 24 many, many years to come. 25 CHAIR NORMAN: Okay. Commissioner Seamount? R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 27 . . 1 COMMISSIONER SEAMOUNT: I have no further questions. 2 CHAIR NORMAN: Commissioner Forester. 3 COMMISSIONER FOERSTER: I just have one. Mr. Hodges, do 4 you have a PNID (ph) or other schematic that we could enter 5 into the record? 6 MR. HODGES: Yes. 7 COMMISSIONER FOERSTER: You did a wonderful job of 8 explanation, but having the drawing would be beneficial? 9 MR. HODGES: Would you like the entire system or just 10 what's at Alpine pertinent to our request or -- just let me 11 know what you would like to see and we could certainly provide 12 it. A copy of our application to the Regulatory Commission 13 would have quite a bit of that..... 14 COMMISSIONER FOERSTER: Okay. 15 MR. HODGES: .... . information. 16 COMMISSIONER FOERSTER: Okay. That would be good. MR. HODGES: All right. COMMISSIONER FOERSTER: Thank you. 17 18 19 CHAIR NORMAN: Thank you very much, Mr. Hodges. 20 MR. HODGES: Sure. 21 CHAIR NORMAN: I think that that will conclude our 22 questioning for you. 23 MR. HODGES: Thank you. 24 CHAIR NORMAN: Mr. Erwin, could we ask you to come forward 25 again, please? R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 28 . . 1 MR. ERWIN: Certainly. 2 CHAIR NORMAN: And, Mr. Erwin, do you understand you 3 remain under Oath in testimony given to the Commission? 4 MR. ERWIN: Yes, sir. 5 CHAIR NORMAN: Very well. Commissioner Seamount, any 6 questions? 7 COMMISSIONER SEAMOUNT: I have no questions. 8 CHAIR NORMAN: Commissioner Foerster. 9 COMMISSIONER FOERSTER: I just have one. Well, it may end 10 up being more than one, but we'll start with one. You know, 11 ConocoPhillips is still required to report gas disposition 12 volumes for our purposes and for royalty purposes and whatever 13 purposes, so how do you plan to do this to an acceptable 14 accuracy? 15 MR. ERWIN: We've not presented to the Commission yet a -- 16 or to the DNR actually an allocation procedure methodology for 17 the gas skid, but essentially it will boil down to relying on 18 the inlet meters to the skid to measure the gas going into the 19 skid and then we propose to track out the value -- the gas 20 equivalent of any liquids that leave the skid so that we can 21 arrive at a net gas that arrives at the -- that's delivered to 22 the village. 23 COMMISSIONER FOERSTER: So is any of the metering 24 equipment that you plan to use of the accuracy required by 25 regulation? R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 29 . . 1 MR. ERWIN: Currently it's my understanding that there are 2 three gas meters involved, two on the inlet, one on the outlet 3 and they're all identical meters. 4 COMMISSIONER FOERSTER: So none of the -- you're going to 5 be doing addition.. '" 6 MR. ERWIN: We're not..... 7 COMMISSIONER FOERSTER: . . . . .and substraction from meters 8 that are less --..... 9 MR. ERWIN: Are comparable quality..... 10 COMMISSIONER FOERSTER: . . . . .are comparable and of less 11 accuracy than required? 12 MR. ERWIN: That is correct. 13 COMMISSIONER FOERSTER: So I'm going to ask you the same 14 question that I asked Mr. Hodges, how did we get here? How did 15 that happen? 16 MR. ERWIN: I would just -- I could only conjecture. The 17 North Slope Borough was the primary contractor for the de- 18 and responsible for the design and construction on that skid. 19 And we had opportunities to provide input around the design 20 specifications and the like, but ultimately I don't know. The 21 skid arrived -- the skid arrived at our field with those meters 22 installed. 23 COMMISSIONER FOERSTER: So you allowed the North Slope 24 Borough to take responsibility for putting in something that 25 would leave you unable to meet a requirement that you knew you R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 30 . . 1 had? 2 MR. ERWIN: We provided them copies of our specifications, 3 but as owner we gave them -- they accepted the responsibility 4 of design and construction for something that they owned. 5 COMMISSIONER FOERSTER: Okay. Did -- and what's in the 6 in the specifications that you gave them did you give them 7 adequate information to allow them to install custody transfer 8 quality meters? 9 MR. ERWIN: Correct. 10 COMMISSIONER FOERSTER: And so they made a choice to 11 install a different meter than the one -- ones that you..... 12 MR. ERWIN: I don't -- it's -- I do not think that the 13 North Slope Borough consciously made that decision. I think it 14 was a decision ultimately probably made by one of their 15 contractors. 16 We routinely use this same meter within our plant. It's 17 just not an uncommon meter in our process train. We simply 18 don't normally use it in custody service -- not -- not -- we 19 don't normally I misstated that. 20 COMMISSIONER FOERSTER: Normally wasn't the right word 21 either, yeah. 22 MR. ERWIN: Normally was not the correct word. 23 COMMISSIONER FOERSTER: Right. 24 MR. ERWIN: We do not use them in custody service. 25 COMMISSIONER FOERSTER: I'm not taking this any further. R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 31 . . 1 CHAIR NORMAN: Okay, very good. Commissioner Seamount, 2 anything further at this point? 3 COMMISSIONER SEAMOUNT: Nothing else. 4 CHAIR NORMAN: All right. Well, thank you very much, Mr. 5 Erwin. 6 The Chair will ask now if there are any other persons 7 present who wish to offer any comments or testimony or if there 8 are any persons who have questions that they would like the 9 Commission to pose? Okay. Take -- yes, Mr. Kotowski, come 10 forward, please. 11 Do you. . . . . 12 MR. KOTOWSKI: Well, I just..... 13 CHAIR NORMAN: .... . intend just to make a comment? 14 MR. KOTOWSKI: Yeah, I just want to make a comment or ask 15 them. . . . . 16 CHAIR NORMAN: All right. We don't swear you then, but I 17 would ask that you first state your full name for the record 18 and also your affiliation. 19 COMMISSIONER FOERSTER: And spell that last name. 20 MR. KOTOWSKI: My name is Michael Kotowski and that's 21 K-o-t-o-w-s-k-i. And I'm with the Division of Oil and Gas 22 Department of Natural Resources. 23 I would just like to make an observation as to one of the 24 purposes of our letter of November 27th was to, sort of, put 25 forward some sort of mechanism to resolve the situation with R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 32 . . 1 regard to not having spec quality, custody transfer meters in 2 place and what do we do about it. 3 And I think I'm as confused as Commissioner Foerster with 4 regard to this situation, but I would just like to maybe make 5 the observation that maybe the parties can get together and we 6 could resolve something that we could provide to the Commission 7 as a resolution to this. 8 The intent of our letter was to provide a mechanism to 9 where we could resolve the situation where non-spec meters 10 would be used either permanently or on interim status however 11 the royalty owner is compensated and, you know, maybe the 12 parties can get together and we could work this out, but it is 13 very confusing as to how we got here, but more so where do we 14 go from here. 15 CHAIR NORMAN: Mr. Kotowski, yes, thank you very much for 16 that comment. Your letter, it offered to suggestions in the 17 alternative. One was temporary authorization for the current 18 meter with a replacement or the other alternative and I will 19 read it just to keep the record straight so that someone later 20 reading this would be able to tie together what we're 21 discussing now. 22 It's that NNGP may permanently use the Vortex meters and 23 CP shall compensate the royalty owners for the Vortex meter 24 accuracy differentials under the same royalty impact example 25 described above during the permanent use period. So that was R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 33 . . 1 the second alternative proposed that presumably would satisfy 2 the Division of Oil and Gas? 3 MR. KOTOWSKI: That's correct. 4 CHAIR NORMAN: Okay. And then have you had a chance to 5 review the letter from the Department of Revenue that contains 6 a condition also related to this differential, accuracy 7 differential? 8 MR. KOTOWSKI: I was only provided the DOR letter this 9 morning. I had not seen it prior to this morning. 10 CHAIR NORMAN: Okay. 11 MR. KOTOWSKI: So it -- and I don't have any -- I haven't 12 looked at it in detail to provide any useful comments at this 13 time. 14 CHAIR NORMAN: There is a condition number five there that 15 also addresses this question and talks about that the producer 16 pay production tax and royalty on the larger possible 17 measurement uncertainty error, for example, multiply the 18 monthly volume by the difference of the proposed Vortex 19 shedding meter uncertainty one percent plus or minus less the 20 generally accepted Petroleum Measurement Standards based on the 21 orifice type gas meters .67 percent plus or minus. 22 Would that satis- -- does that address your concern? 23 MR. KOTOWSKI: It appears to me to be a similar proposal 24 to what we suggested in our letter. 25 CHAIR NORMAN: Would you be able to think about that and R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 34 . . 1 then let the Commission know if this particular paragraph 2 captures the same thing that you're offering as an alternate? 3 MR. KOTOWSKI: Yes, I will. 4 CHAIR NORMAN: And could you do that with -- let's say 5 within the next 48 hours, does that give.. ... 6 MR. KOTOWSKI: Oh, I think that's possible. 7 CHAIR NORMAN: Very good. Then if there's no objection -- 8 this is addressed to the Commissioners, if there's no objection 9 we would leave the record opened for that purpose to receive? 10 COMMISSIONER FOERSTER: I have no objection. COMMISSIONER SEAMOUNT: Yeah, plus the copy of COMMISSIONER FOERSTER: PNID. CHAIR NORMAN: Yes. COMMISSIONER SEAMOUNT: .... .PNID..... COMMISSIONER FOERSTER: Or the RCA submittal. . . . . 11 12 13 14 15 16 CHAIR NORMAN: Or the RCA filing. 17 COMMISSIONER FOERSTER: Yeah. 18 CHAIR NORMAN: Very well. So that would be then by the 19 close of business this Thursday, Thursday being the last day of 20 this month, the 30th. We would receive both of those, two 21 other items for the record. 22 I don't believe we have any further questions or let me -- 23 okay. No further questions. Thank you, Mr. Kotowski. 24 MR. KOTOWSKI: Okay, thank you. 25 CHAIR NORMAN: Are there any other persons present at this R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 35 . . 1 hearing that have any comments or questions? Okay. The Chair 2 sees no one else asking to be recognized. 3 I'll ask, Commissioner Seamount, if you have any 4 final..... 5 COMMISSIONER SEAMOUNT: None. 6 CHAIR NORMAN: . . . . .points? Commissioner Foerster? 7 COMMISSIONER FOERSTER: None. 8 CHAIR NORMAN: Okay. Then without objection these 9 proceedings will be adjourned at the hour of 10:17 a.m. 10 (Recessed - 10:17 a.m.) 11 (END OF PROCEEDINGS) 12 13 14 15 16 17 18 19 20 21 22 23 24 25 R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 36 . . 1 C E R T I F I CAT E 2 UNITED STATES OF AMERICA ) )ss. 3 STATE OF ALASKA ) 4 I, Rebecca Nelms, Notary Public in and for the State of Alaska, residing at Anchorage, Alaska, and Reporter for R & R 5 Court Reporters, Inc., do hereby certify: 6 THAT the annexed and foregoing Public Hearing In the Matter of the NORTH SLOPE BOROUGH request for CONSIDERATION of 7 VARIANCE UNDER 20 AAC 25.228(j) for NUIQSUT NATURAL GAS PIPELINE, COLVILLE RIVER UNIT, was taken by Suzan Olson on the 8 28th day of November, 2006, commencing at the hour of 9:00 a.m., at the Alaska Oil and Gas Conservation Commission, 9 Anchorage, Alaska; 10 THAT this Hearing Transcript, as heretofore annexed, is a true and correct transcription of the proceedings taken and 11 transcribed by Suzan Olson; 12 IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal this 30th day of November, 2006. 13 14 Q~~e.-~~,,~ Notary Public in and-for Alaska My Commission Expires: 10/10/10 15 16 17 18 19 20 21 22 23 24 25 R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 37 D ....,-....,. ~ ~ ~ c ¡ I I I I ¡ ] I ¡ ¡ t I I t :.r I 1..- I I I I I _______J -----.- f::::Z. ~ ~ B ~ ~ TMK (l(J41Ø'n<»l ) ¡ ¡ I I I I I I I i ~ 1 I I I I 3 RECEIVED )'i NOV J,J1' 2006 AI.ah Oil & Gas Cons, Commil$iøn Anchor&g_ Ut Mt~'$1}: ... t , j, < $.64 ì,ln'£$ . ~ ~ . I 4 CONDITIONING 7 ALPINE ~.""""...."~_.".....~....."......,,. 8 I I I ~--~ ....;.~- D I I I I ¡ , i I it::Þ I I ¡ ¡ I I ! I I I ! ¡ 1 I I I i. , C><J I I I I I I ¡ I I ¡ 1 I I I I , c . !><:3>- "......¡j:':. ~ .E::1 0i '.'i- t ~ ;¡ , . ) ¥ 1 ":r:(' T " 1 r-' ;n:.. T MS:::1 9 I I I I I I I ¡ -þ B - A j¡{(j $$ SWØII·AI\'~7 PROtt$$ FLOW DIAGRAM W¡QStJT AJEl GAS UHCAS SKÐ-001 I'ffiI£ì:I :2 ImD. 1, ~ UAT" ~.lS~· ...._~T~_ It ~ ~JØ 1lmEC'm A~ ~ ~~IMIIm·~·øt~ $. II'IaMVJ.I.. _.8&.~ AS·.pÞ.~ ~~ IUì \lIW. m.lEVE TO Aft AI.ì'R .RiEt.m' IÐœt I ,) <$ J .' 5 6 " ì B ^ B C ", E F' UIILIIU.\ID[ßJHG; . . .!-~-aol-~- ñ~L.tCJHK;ðURACIH!i ll/j~IUlJOH 211 ~ 2" IIOT - piP[ SPECIFlClIIIQl AS.J - 1501 Rf, CS (COLD) AI1.3 - 1506 Rr. S5 85.3 - 3001 Rf, CS (COLD) 04,J - 6001 Rf, CS (COLD) 01.J - 6001 Rr. S5 D..I - 15ÐO' RIJ. C5 (COLD) n..I - 1500' RIJ, 55 Wl - .10001. CS (COlD) - UtlUI.l!MBrB 001 - 100 (PC) JOO - 399 (A) 100 - 199 (rG) 400 - 499 (1.1) 200 - 299 (He) 500 - 599 (N) -~ PG - GAS (PRODUCED, I1.ARE) ORANGE: rc - GAS (fua) YE:LLOlr I1C - HYDROCARBON (PROCESS) MAROON A - AIR (INSIR.. UTllIlY) CREF.N 11 - IIETlIANOl PINK II - IIIIRDCEII TAN (iJA 62 291 ~FROLI /lUIQSl/T "ATCHIJOC TIII[R LOSS Of COlll!UlllCAl1ON TO IIUIOSl1T 'o1Wi' Hoo----- -UIIUlZI: /IOTt '9 < OSD-200 I Æ!?"K- ~H ~ /101'£ 10 AlPINE un GAS ~fOO-.I0204.oo!> (CD-I un GAS HEADER) 2" ," tNI 2"-15001 f,C. IICCWA-ros f-3.3 III' UIIIO' Øf mÐOR ,J ~ ~ ;:'¡~ð ~ ~ VGCWB-rol IIlCWB-FOI NOIt 5 ~ oÆ~ ~ UTIU1Y AIR VUIIS9= ICfOO-6S.102.oo~ (IIODlILE C4) I" iVSIISB_J02 iVSNS9_J02 11C1M1-812 ~-812 VSNSÐ-J02 VUNSB-J02 .1/4' 3/4' o 1101'£ 6 I"-A-JOO-Wl ~VI..NV8_802 ~VUN9- 802 YC1N11-812 VCNV11-81, Vßl SB-J02 VUNS8-302 3/4" .1/4' . 0 NO'IE 5 I" -N-5OQ-Wl - --e>-- , J/"- ~ 1I\WA 2f1 0/:1[,';5 VIWfA ~ N11'fIOO[H YBNSÐ-JOZ rfOO-67J02.oo~ I" I" H fìPDIi (p&ìT\ ~---\:êl ~W: WI ~ '1 INSTRUUEN AIR YBNS= ~FOO-65J02.00~ (lM>DUlE C4) I" t I 'M". 12 PlJ,C1'S - - NOIt Z 2 SPARES VSIISB-302 8-302 /lSB-3O" , "-A-JO'-Wl 0 o ConCK:6Phillips P.O,/ECM TYPE DISCP VDC SHT REV VND MP 2118595 0001-001 001 CP-V-62211AjBjCjD UOL-SIf.V[S 2" -PC-004-~,J Z~iXk"~' .1"-'500' 1J ---cJ , 2")lJ· liES 2' -PC-OO~-~.J 2" ," SPEC BUNO l19C1L-r25 'I'" ¡ wJ ~iI.: ~#' _ "VCCW8-fO I ..: e:- 2 2"~~§ 3/4" . 2" -PC-007-fJ.3 '¡I \ !! .. ! _._ 2"/'"-I'I)-025-tJ.J ~ ~"-I5001 C4D2"'3' RO UI'SH &7 G CP-V-62211A1s ' '-.rx CP-V-62211cjo RECEIVED ~. NOVM2006 Alaska Oil & Gas Cons. Commission Anchorage 'IE '3 ""5IS; fiRE PSV ~1"_PC_02e_AI"J SIZE: ,".," IIPT /1\ ~.., DO OOT POQŒI SET 0 JI7& pol; ,v () Ó ~ a ... ~~~ ~ ~ 1·1'2- ~.< ~~"', 5UJP[ 'In VCAJ:Ä-A24 . VGCWB-FOJ ~ ~C50 f.P. ir \2"~~~ * \2"/I·-PC-024-fJ.J 3/4" --!><Jo /IO'IE I SPEC BUNO YGCW8-FOJ ~" YØCI..E-f25 2- .1/," --!:><}1110T£ 1 VGACB-80J ^ 2"-PG-026-AII.J TO f1.AA( H(A )ER '100954-00-001-02 ) CPII9-62301.001 4 E 5, SIZE: a.5" !.D. x 25'-5 1/2" FOF TO CENTER "'--"'f)ESlCIr.'3H~O"'='5O'f"1\N8 UATERIM.S SA-JJ.I-6 PIPE SA-J50-UF2 ~GES SCH 160, 15001 RTJ 1/16" CA 'o1Wi' f.1 --¢.:t- '. ~ I '1'- ~ SPEC BUilD <.:I 2" YBCU:-F25 2" I ~ ~ 2"-15001 ~ ,~,-~,u · X ~"-15001 3"02" 101[5 "! '1 '" '" <> I " .. " )' ~~ , f']1~}¡.vI ' NOTE 11 : '; H20 ~' D£WPOINT ^ll " IINAlYl£:R 118 , , 8 , , , , , , , , , I C '¡ I , , , ,.~ , , , , ~ ...... .. 10 EX~G(RS '1~954-oo¿¡Ol~ (CP-[ -62212/CI'-E-6221.1) CPN9-62Jo1.001 ~I 51 212 ~ 2"-PG-008-FJ.3 ~"- \I8Cl£-f25 2" SPEC DUNO 3/," ---t><:Þ NOl'£ 1 VCCWB-roJ /IOTE 1.1 BASIS: fiRE SIZE.: ,".," NP'! SET 0 J 176 pol; ... o E F' /IØIES; I. ~ CONNECTUI 1'01I 00'RESSIJII1l.4 ~ UOl-SI:\6. 2. R!:GUlATtIRS 111[ UJCAIro 011 YN,YES 511MB. J. PSV5 TO II[ ~ NIl) _ IN5UL\l1OII ÐWIICE1S. 4. PII[SSUR[ tIIOHSlIITt1IS « I!OIDI[ 1t:)UI(It .m1 1/2" S.S. l\I1 D Ç 5. 1M: NII1IOÇ[f SlAIIOII AI QI1IER !NØ ~ 1/1[ 8IJIlDtIG. (\IS[ HOSE tw'UtG -. :lml OR [CUI,l) .. IN: UItI1Y ", SlA110N AT DIIÐI DID II' THE 1IU\IIfIC. (lIS/: HOSE CDII'lIIG 111III 2CIIIO OR [QIIoIl 7. a. 1'-0" _ CØJ) TDlPEAAME PI'[ II ~ I~ ~5~aWl5fMon.OCIŒD 1IIIH XV-52227 50 THAt ORY 0IIt VAlVE W BC OI'EN. 11. oWl" IUT8 15 m BE A EIPCS CMIU. MJIIU. I IS IM.T 04.05..25 00 00 0 J ) )ED IJII( ÞMIIØS - I'C 04.OJ..Z3 00 DC t.!P-CPN9- 6230 1.00 I G ~EVISaI IS fÐI ClJSTÐl Dl,llHltRIW. II!RK ... 04.02.15 00 DC CUST OJ,O. . F RE'IISUI AS PER CUSIIJoI~ UlRIC ... 04.02-18 CG oc TOLERANCES 1HIS DRAWlOO 15 1IIE NANA Call Engineering LLC PROPER1Y OF IWIOYER ,~ THE HANOVER G E II!.VIStØASI'UIIII!J!NAI.w.RK1II' 0'.01.1' 00 115 NIO IS NOT 10 BE D II!.VIStØ AS POI çUSIOIIDt _ ... 03.12.24 IISP 115 tIlTS 'II:I/S" USED FOR AJlf PURPOSE COMPANY nIu ANGI.£S *1/'1: OlHEll 1tWI 1IIAT P '" ID NUrQSUT GAS c RE-!511Ø FOIl If'PfICNH. Dl12.0II BC DC fOR WHX:H rr IS CONDmONING MODULE ALPINE FACILITIES 8 ISSIICD rÐR APPROY.tI. 03.11.21 00 00 wnD ASS'Y. t.1/4· SPEOfTCAU Y f\IRNISH(O. HANOVER MALONEY MJI/IÑ ~ IWU/ITS I~~ OQ r- ro1 A IS5\IED rÐR I!Ð 03-1 }-OI II" PROJ. /1O. IlAY 25,1CII4 IB:2J 8825 5hopo'll /load S. E. Hf DWG NUIIBm DESCRIPT1O/I REV. OESCRll"llON DATE BY C~ ""'054-00-1101·"'0 ÇaI;...,. oIIbort. T2H IXI ..1£ .... ~tQ'1- 113. I$lCT. NO. ~ 0AOD. 1.0. (40J) 279-5000 0.1-10-06 CA5954-0D-OOI I or 2 1 REFERENCE ORA~NGS REVISIONS 11 4 r 5 6 7 8 9 10 2 J CP-V-62214 OCKOUT DRUM (AlPINE END) CP-¡ -61213 " ".,. '. "'':.,':r 1>"" GAS/LIOUID EXCIWIGER DESIGN: 770 pSlg 0, 7 to-22-IN-2C2E CA: XI MODEL WBE":';' ,"", "'"","",,"" ""' "'RE RE''''" .. ~,,~" "'EUJ 1 "" , ,/,' ru'~ "'''''" NO""", 1""- ""'''' ""'.' " ~ ,0> 10 "" "" -:::: 'c ,..u, ,,-m. "'RE' ""'" rum, "'. ~. : . t5D 10 ".r """,,, ". ",.J<)~ DESIGN SH£LL: 770 PSl9 II OIV I GES' Si\-182-FJ04/304L ~. 2'-PG-03'-Þ.1 U ASME CODE SEe VI FlAN . ~ ~ OIII/[R .." . ,,·....TP JR' r. " . '_~f1f ELECT. IiEÞ.T TRACINC SHTUEL~ ""'- :.--m "JRI(W) rttb, "''''' / Lcroo-J5~!> ' """ '" = - 0' NPS 5CH 40, E"qm ".",.J<)' 1I.Ib..W j . C__ I I ~ '. ,~~ .~,. ETURN BEND HOUSING it TUB... 'ì' , . ..:_____________-::. 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POINIS~ 1/4- NOT( 16 t.4P-CPN9- 6230 1.002 "CllSTO..ul NANA Coil E"gíneeri"9 LtC rnu: CONCEPTUAL P '" ID NUIOSUT GAS CONDITIONING MODULE ALPINE FACILITIES _ ,- I~ IU.~ I_MO. Hr DC NTS tIIITt >0). ~tO' -.. lID. SIll. MI. !(VIS... 03-10-06 1 CA5954-00-001 12 or Z I 1 10 I 11 CP-V-62214 RECEIVED ~Z006 ~~ OSD 2A,6J.203.205 6f... . I ID :So] ! ~ ¡[50 1.2,14,18,20.2 ,21A.22,2:>A! IESO 1,2.11,181 I ________J THE HANOVER COMPANY HANOVER MALONEY 6525 Sh.panl RO<Ió' S. E. (aIQo'Y, Nborto 12H IXI (403) 219-5000 9 NOV Alaska Oil & Gas Cons. Commission Anchorage 04.05.25 ÐC ÐC D4.DJ.13 ÐC oc: 04.Dl.25 oc: oc: 04.ÐZ.16 CC DC TOlEAANCES THIS ORl.WlNG IS THE PROPER'IY OF HANOVER I~ 04.<11.19 oc: lIS NIl) IS NOT 10 BE O3.12.2f IISP lIS CUTS :1:1/8" USED FDR IJl( PUIU'OS£ OJ.12.0II DC oc: ANCLIS fl/T 011£R 'IIWI THAT FDR WHICH If IS OJ.1\.21 III: DC wao ASS'V. fl/4· SP£ClACAU.Y FlJRHlSf m. QJ-IIHI6 IF PAOJ. NO. _ 26,2004 l_ OA'"' IIY CK !ORCD. I.D. 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I """ i' -~! r -1) d" )l4-llr~1P_LlJTI urTlr\~ :y 0r-HË=1/,,:HC.'O'.OU - !8tr1&- J ~~c' --- - ,¡ "I õ - 0 0 - ì~.r 1\ 1\ "_..IL J")(2' CONe. (M'.') I-rt-I , ~I J9 -~5' I ~ CP-V-62211 ~ CP-V-6Z211B CP-V-62211'; CP-V-63211D I( ... ~ n , to; ~ s !r~ ., ...1 í iJ ,,2 . ~~ 0> t,!:z -.'. ~8 SECTIOt~ 0 29'-1" II 12'-7%' ~I N u.__~ © SECTION ß'\ \::V I-rt-I J I-rt-I c.\S954-04-005, sm. 1 PIG WJNCIfÐI CP-X-62215 c.\S9501-04-OO', SIfT,I KNOCKOUT DRUII CP-V-62214 c.\S954-Ð4-00J, SIfT.I EXt/WIGIJI. CP-E-822IJ (SU9-tON) CA5954-04--002, SIfT.1 EXCHANGER CP-E-62212 (S\J9-aJN) CA5954-04-ool. sm.1 MOl SI.'ÆS CP-V-'52211A,B,C,D CI5IIS.-oJ-ooI SIfT.I,2P1A1FOAII DETMS Cl5llS4-0.HJ0I. 5111I-5 SIR\JCIUR.IL DETMS C1o.'I954-(ICI-ooI 5111.1, 2 P ,t 10 DWG NUMBER OESCRlPTJON REFERENCE DRA~NGS 4 I 10 CAS9S4-os-001 - 061 jsol4f:1RlC. SI'OOl DRAWINGS 2 ADDED 1/" 10 D.EV. OI~DISIONS I ADDED PAIIEIS ,t J8'S . 0 ISSUED fÐR CCNSIRUC110N C CDIEIW. RtVISIOII B 'l!:1I1IC.4I. !lOt[ S1lVE VERSION A JSSU[ 10 QJSIOMER roll -. RE.V. OESCRtI'T1ON REVISIONS 6 CUSIOWER 0'.00_29 DC 04.OJ.2J DC O4.OJ.IO \III 04.02.23 DC 04.01.05 DC OJ.11,26 DC OATE 11( THIS DRAWING IS THE PRDPERIY or IWKIVER AND IS NDT TO BE USED FDR ÞNf PURPOSE OTHER THAN 1HAT FDR WHICH If IS SPECIF1CAlLY fURNISHED. MAY 25,200' 15:03 CA5.54-02-ool..... DC DC DC DC DC DC PROJ. NO. CK NANACOLT ENGINEERING LLC -~ THE HANOVER COMPANY TI'Il£ B /~ C x:= o !I E fl !I F G HANOVER ....ALONEY 8825 She""'" Rood S. E. Cak ary, ÁIberIa nil IXI (403) 279-5000 9 PIPING LAYOUT - SECTIONS 'A' & 'F' CONDITIONAL ....ODULE AlPINE FACILITIES -DC N>PA<MD ISCAU: 15.0. NO. ,- No. ~T[ NO. Rto'¡_ NO. ISHf'. NO. IRf.\IISIOII 03.11.21 CA5954-02-001 2 or 5 2 I 11 PROD. I.D. 7 8 5 . A Conoc~hillips TYPE DISCP P.O./ECM VDC SHT REV VND MP 2118595 0003-003 001 0 . CL-\ ~ =J= ~-,~ , A ,,_0 fT ,~t ~lWt - - -+~¡~ I 1 1 I -~ ) -1\' 1 " ~) 21 I 1/ / ¡ / / ~I/I/!î ""':1(1 '~ ~J:A£ ~I L' ! 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CHECKER pt. -~r r I I III III 1- 1- II SECTION 0?\ ~ 2 3 00954-05-001 - 061 !;oMETR1C SPOOl DflAWINGS 00954-04-005. 511I.1 PIC 1AUNCIt[R CP-X-8UI5 CA5II54-04-004, SIfT.I KNOCKOIIT DRIJI CP-Y-82214 CA5ll54-OHIOJ, SIfT.I EXCK\HGER CP-£-82213 (SUB-coo) 00954-04-002, SIfT.I EXCK\HGER CP-E-6UI2 (SUB-coH) CA5954-04-00I, SIfT.I IIOl 5II.'ÆS CP-Y-822I1A.Ø,C,o CA5II54-OJ-Ð01 SUT.I,2 I'IAIfI1RtI OEIAI.$ CA5954-0J-00I, SUTI-5 SIRUI:1IIRAI. OEIAI.$ CA5954-oG-ooI SUT.I, 2 .p '" I) DWG NUM8ER DESCRIPTION REFERENCE DRAWINGS 4 I 3 2 I o C 8 A REV. ÞS BlJlLT ADOED 1/4" TO EUY. DlM~ ADOED PAN£IS '" JI'S I5SUE8 FOR CONSTRUC1IIN C£NERII. Rl'I1SION VEIIIICoIL 110I£ SIM YERSICH ISSUm 10 CUSIOIIER FOR N'PtIIWIl DESCRIPTION REVISIONS 6 04.05.25 DC DC 04.03.29 DC DC 04.03.23 DC DC 04.03.10 J J DC 04.02.23 DC DC 04.01.05 DC DC 03.11.21 DC DC PROJ. NO. DATE BY CK PROD. 1.0. 7 THIS DRAWING IS mE PROPERlY OF HANOVER AN ) IS NOT TO BE USED FOR·1m PURPOSE 01HElt 'THAN THo\T FOR WHICH rr IS SPECIF1CAU.Y FURNISHED. ....y 2S,2OO4 16:03 CA5e54-02-OOl""" CUSTOII£R . CUSTOMER CONNECTION SCHEDULE 6 ," JOOOI i . MARK SIZE RATINQ 1YP[ SP£C DESCRtPTlON 7 .- JOOO, t 2'. 1SOO' RtJWN r-3.3 AlPIN( m GAS F'ftOV CD-I H£AD£R . ."' JOOO, 2' 2- 3001 RFWN 8-5.3 run GAS F1IOU r.G. OYERH[AO H£ATtA . ,- JOOtJ' ,. 6001 RfWN D-7.J LIQUID TO GAS COND. rtASH VESSEl .. 3"' 300' RFWN ø-~.J GA!; mow \AUNCH£R to Þ1P£lIN[ 5 ," t50' RFWN A-tt.~ V[Nf to AlPIN( HP HARE H£AO£1i' NPI A-5.J UTilITY AIR NPI A-5.J IÆ'JIW«>l INl£T NP1 A-5.J MTRQG[N NP1 A-8.3 INS'fRU'M[Nt N/f -~ THE HANOVER COMPANY HANOVER MALONEY 8825 Shopont Road S. E. CaIVcøy, Alberto 12/1 1 XI (403) 278-5000 9 NANACOLT ENGINEERING LLC G IfI\L - DC PIPING LAYOUT - ElEVATION '8' CONDmONAL MODULE ALPINE FACIUTlES ""PIIiM:b 1-': IS-D. NO. IUNII NO. M1[ NO. O£Oj_ NO. 1$Iff. NO. 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SecHI.... _ to Iw:wt 7. .-- ~ , 0 "tðþ _J/"~ f tcriorI Sleet r:omporoento 1f'ooI1Ie....!rom CCIIItotlir>o stoinlat $lee! tol1l Xltlt!nb. ~~,~ UIeIf Oft tIñen SlNt 1M' Mf be ~ CIII $1"""'- SIeIl to} ""... tontwll 111 11 '"'" RECEIVED ~.fÇ' NOV 2)r ZOüô GAArrllT£f1I.IEA!l{JIJ('.AA9ST'r\{CC! Hnum RINC" Jð.SSINN{ ST\JÐSAS'IVSA-J1O-GAAMl1 ASTII SA-I"-CAAO( 7 1/1·10 I 1/'1' JOOO'. SWSA-III7-rJlðI. ')11l1JW A51101 SA,-"l)-WI'JIIl NO. ). 7 PROJ. DC DC DC DC DC DC CK DC DC UU DC DC DC BY 04.03.23 04.03.11 04.03. 10 04.02.23 04.01.05 03.11.21 DATE SOMETRIC VIEW REVISm N01tS 1S 1NOK:A1£D ADDOI PAN£1S. . J8's ISSU£Ð FOR CONSIRUC11OII GOEJW. R£VISIOII 'IEI!I1CH. IIOl£ SIl'IEVERSIOII ISSU£Ð 10 CUSlOItER FOR N'PROY1t OESCRlPTlON REVISIONS 6 2 I o C 8 A REV. S CM054-05-001 - 061 ~UEIRIC SI'OOl DRAWINGS CM054-04-00S, SIIT.I PIG LU«:HER CP-X-12215 CM054-04-Q04. SIIT.I KNOCKOUT ORUII CP-V-62214 CA5954-04-o03, SIIT.I EXCHANGER CP-E-IUI3 (SUB-cotI) CA5954-04-002. SIIT.I ÐCCIWIGER CP-E-IU12 (SUB-cotI) CM054-04-00I, SlIT.! MOl. SI'IE5 CP-V-I2211A.ø.C.O CM054-03-001 SIIT.1i. PlA1fIIIIII ÐElMS CA5054-03-0Cn, SllTI-5 5IRUCI\JR.\I. ÐElMS CA505,4-ocHX11 SlIT.!, 2 P . D DWG NU!oIBER OESCRIPTION REFERENCE DRAWINGS 4 I 3 2 c f)¡ F E #6 ·. . STATE OF ALASKA OIL AND GAS CONSERVATION COMMISSION Public Hearing - Nuiqsut Natural Gas Pipeline November 28, 2006 at 9:00 am l~AME - AFFILIATION ADDRESSIPHONE NUMBER (pLEASE PRINT) ~~::% :=~~~~;;~~o J)A-Vb~D~K ^) Sö ',)ax:) C ~T; 041j£ ¡¿ofr , A()ß:C;¡;;/ 79;J-/~3.2. }< r\'S1\-'º-'n V,€ ~ P'é.1\-rû leu m .A!<2ö\ 'i5 Òo...Y\ {(.,þ ~ ~ J 5 2r¿ç-l >'57 c-r ¡) 1::+ ,'Y\'\ ~ ÚW\~ J-l.¡t) - ty--¡ e -- ê /'J /4 ;;.-k\J\ÍJ LCv,~7 2-(0') - b4S\f .- <: t> A tv\ ~te ~otDws.K ;:} ¿,q - 60, d- ~ ~ ~"f -S)1,"I ]X,L TESTIFY (Yes or No) \-\.c1'Ð <C ¡ViA r'- I I ./Va N-o '1(7 Nt¡ l}ü ~D #5 . $~£~~ @¡ £~£$~£ DEPARTMENT OF REVENUE Tax Division Mr. John K. Norman, Chairman Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Suite 100 Anchorage, Alaska 99501 . FRANK MURKOWSKI, GOVERNOR o State Office Building PO Box 110420 Juneau, AK 99811-0420 907.465.2320 ŒI 550 W Seventh, Suite 500 Anchorage, AK 99501-3566 907.269.6620 www.tax.state.ak.us November 27,2006 C ED RE EIV NOV 2 7 2006 Alaska Oil & Gas Cons. Commission Anchorage Subj: Comments on Hearing for gas metering, proposed gas delivery from Colville River Unit to Nuiqsut Dear Mr. Norman: The Tax Division, Department of Revenue, State of Alaska respectfully requests that the Alaska Oil and Gas Conservation Commission consider the following recommendations when approving the use of certain gas metering equipment for proposed delivery of gas from the Colville River Unit to the City of Nuiqsut: The Tax Division encourages the granting of conditional approval for use of the Endress-Hauser (EH) vortex shedding meter. The conditions should include the following: 1. Set a monthly maximum allowable flow rate that is double the anticipated rate, perhaps 30,000 Mcf. 2. Allow only residential use. 3. Require some level of monitored, regular meter proving or re- calibration. 4. Require some form of meter redundancy if meter calibration involves removing the meter from service and transport off-site to a laboratory. . . Page 2 November 27, 2006 5. Require that the State of Alaska be kept whole by requiring the producer to pay production tax and royalty on the larger possible measurement uncertainty error, for example multiply the monthly volume by the difference of the proposed vortex shedding meter uncertainty (1.0% plus or minus) less the generally accepted Petroleum Measurement Standards based on orifice-type gas meters (0.67% plus or minus). Thank you for the opportunity to comment on this matter. Sincerely, ~~~~ Robynn J. Wilson Director Cc: Dudley Platt, Tax Division Gary A. Rogers, Tax Division #4 @~&~~ @~1A@j!jA DIVISION OF OIL AND GAS F. H. MURKOWSKl, GOVERNOR DEPARTMENT OF NATURAL RESOURCES 550 WEST 7TH A VENUE, SUITE 800 ANCHORAGE, ALASKA 99501-3560 PHONE: (907) 269-8800 FAX: (907) 269-8938 ~v November 27, 200ft, RECEIVED NOV 2 8 2006 J\I:askø Oil &. Gas Cons. Cormilliotl'G Anchorage '" John K. Norman ChairmaÌ1 --------::.. Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue, Suite 100 Anchorage, Alaska 99501 via Fax (907) 276-7542 and Mail _._~-~.....- Subject: Nuiqsut Natural Gas Pipeline Request for Consideration of Variance under 20 AAC 25.228 Dear Mr. Norman: I am commenting on the Alaska Oil and Gas Conservation Commission's Notice of Public Hearing regarding the North Slope Borough's (NSB) September 14,2006, request for a variance to allow use of gas metering equipment with measurement uncertainty greater than American Petroleum Institute petroleum measurement standards for custody transfer. The State of Alaska is a royalty owner in the Colville River Unit (CRU), and is entitled to a royalty on the gas removed from the CRU to the Village ofNuiqsut through the Nuiqsut Natural Gas Pipeline (NNGP). The Department of Natural Resources (DNR) has three concerns with the NSB proposal: 1) it proposes to use non-certified gas metering equipment for custody transfer and royalty measurement; 2) the requested variance from the requirements of20 AAC 25.228 will not result in equal or improved accuracy in measuring hydrocarbons removed from the CRU, as required by 20 AAC 25.228(j); and 3) while the volumes of gas to be metered in this case are small, the unconditional approval of the variance may set a precedent with unknown, unintended consequences in the future, for example, when gas prices and gas volumes may be higher. DNR neither wishes to delay the transfer of gas to the Village ofNuiqsut, nor unconditionally accept the use of non-certified hydrocarbon metering equipment for this custody transfer. Given these concerns, DNR proposes the following arrangement: 1) NNGP may temporarily use the non-certified vortex meters until it installs approved custody transfer meters and, ConocoPhillips (CP) shall compensate the royalty owners for the vortex meter accuracy differentials under the royalty impact examplel set out on page three of the September 14, 2006, NSB letter during the temporary use 1 The accuracy differential is + / - 0.35% for the HP lift gas inlet vortex meter, and + / - 1.025% for the fuel gas inlet vortex meter. "Develop, Conserve, and Enhance Natural Resources for Present and Future Alaskans. " . . John K. Norman Nuiqsut Natural Gas Pipeline Meter Variance Page 2 period; or 2) NNGP may permanently use the vortex meters, and CP shall compensate the royalty owners for the vortex meter accuracy differentials under the same royalty impact example, described directly above, during the permanent use period. Sincerely, ~(' -..-«-..... ~ William VanDyke Acting Director cc: Teresa Imm, ASRC CRU _NuiqsutGas P/L _ Non-Spec-meters.doc ~Æ?~ @~ ~~~I .X H. M11RIlOWSKl. GOfl£RNOR . 550 WEST f1H AVENUE. SUITE 800 ANCHORAGE. ALASKA 99501-3560 PHONE: (907J 269-8800 FA'>C (907J 289-8938 DEPA.RTMENT OF NATURAL RESOURCES DIVISION OF OIl.. AND GAS November 27, 2005 REC:;EIVED NO" 27 2006 .Alaska Oil &. I;aa Cons. Cornmissim Alnchorage John K. Norman Chainnan Alaska Oil and Gas Conservation Commission 333 West Seventh A:ven~ Suire 100 Anchorage; Alaska 99501 via Fax (981) 216-1542 ad Man Subject: Nuiqsut Natural Gas Pìpelin:e Request. for Consideration ofVanance under 20 MC 25.228 Dear Mr. Nonnan: 1 am commenting on the AJaska 00 and Gas Conservation Commission's Notice ofPubJic Heaóng regarding the North Slope Borough's (NSB) September 14, 2006, request for a variance to allow use of gas metering equipment with measurement uncertainty greater than American Petroleum Institute petroleum. measurement standards for custody transfer. The State of Alaska is a royalty owner in the ColviUe River Unit (CRU), and is entitled to a royalty on the gas removed ftom the CRU to the ViUage ofNuiqsut through the Nuiqsut Natural Gas Pipeline (NNGP). The Department of Natural Resources (DNR) has three concerns with the NSB proposal: 1) it proposes to use non-certified gas metering equipment for custody transfer and royalty measurement; 2) the requested variance from the requirements of20 AAC 25.228 will DOt result in. equal or improved accuracy in measuring hydrocarbons removed ftom the CRU, as required by 20 AAC 25.228(j); and 3) while the volumes of gas to be metered in this case are small, the unconditional approval of the variance may set a precedent with unknown, unintended consequences in the fu~ for exampl~ when gas prices and gas volumes may be higher. DNR neither wishes to delay the fIansfer of gas to the Village ofNuiqsm, nor unconditionaUy accept the use of non-certified hydrocarbon metering equipment for this custody transfer. Given these concerns. DNR proposes the following arrangement 1) NNGP may temporarily use the non-certified vortex meters until it ìnstalls approved custody transfer meters and, CooocoPhillips (CP) sball compensate the royalty owners for the vortex meter accmacy differentials under the royalty impact examplet set out on page three of the September 14, 2006, NSB letter during the temporary use r. The acœracy düierential is +/- 0.35% lor tf1e HP tift gas Wet vortex meter# and +1- U125%.for the fuel gas inkt: vortex meter. "~ ~ tmtl~ NtmnYdResøllircøfor Prøem· tIIJIl FflbgeÂIÐ/tJ;nø." . . John. K.. Norman Nuiqsut Natural Gas Pipeline Meter Variance Page 2 period; or 2) NNGP may permanently use the vortex ~ and CP sball compensate the royalty owners for the vortex. meter accuracy differentials under the same royalty impact example. described directly abovt; during the penmment use period. . Sincerely. ~ ~ William. Van Dyke Acting Director cc: Teresa Imm, ASRC CRUßuiqsutí.ìas PlLßcm-Spec-mctr:rs.doc #3 STATE OF ALASKA ADVERTISING ORDER . NOTICE TO PUBLISHER . ADVERTISING ORDER NO. INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION (PART2 OF THIS FORM) WITH ATTACHED COPY OF ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE F AOGCC R 333 W 7th Ave, Ste 100 o Anchorage, AK 99501 M T o Journal of Commerce Type of Advertisement Legal~ o Display Classified DOther (Specify) SEE ATTACHED REF TYPE 1 VEN 2 ARD 3 4 FIN AMOUNT 2 3 4 REQUISITIONED BY: NUMBER 02910 AOGCC, 333 W. 7th Ave., Suite 100 Anchorage, AK 99501 AMOUNT DATE SY CC PGM LC 05 02140100 Qd DO·IrJ) \J AO-02714008 AGENCY CONTACT DATE OF A.O. Jody Colombie PHONE October 11, 2006 peN (907) 793 -12)1 DATES ADVERTISEMENT REQUIRED: October 22, 2006 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: Advertisement to be published was e-mailed I I TOTAL OF I PAGE 1 OF ALL PAGES$ 2 PAGES COMMENTS ACCT NMR FY DIST UQ 73451 DIVISION APPROVAL: . . Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: The North Slope Borough (NSB) by letter dated September 14, 2006 has requested a hearing to consider a variance to allow use of gas metering equipment with measurement uncertainty greater than measurement systems used previously. A natural gas transportation and distribution system has been installed to carry natural gas produced in the Colville River Unit to the City of Nuiqsut. Gas for delivery will normally be supplied from ConocoPhillips' high-pressure gas lift system utilizing a Endress-Hauser (EH) vortex shedding meter. Alternatively, gas can also be supplied from ConocoPhillips' fuel gas system using a Rosemount (R) vortex shedding meter. Hydrocarbon measurement for custody transfer must be in accord with the Petroleum Measurement Standards of the American Petroleum Institute. Chapter 14 applies to gas measurement. Various metering devices have been approved for gas measurement, however vortex-shedding meters are not included. Orifice meters are widely used on the North Slope for gas measurement. When properly constructed and maintained these meters have a measurement uncertainty of ±0.57%. According to the manufacturer's, the uncertainty of the EH meter is ±1.0% and the R meter uncertainty is ±1.375%. Regulation 20 AAC 25.228 (j) allows the Commission, in its discretion, to grant a variance if the result is equal or improved measurement accuracy. The Commission has tentatively scheduled a public hearing on this matter for November 28, 2006 at 9:00 am at the Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. A person may request that the tentatively scheduled hearing be held by filing a written request with the Commission no later than 4:30 pm on November 8, 2006. If a request for a hearing is not timely filed, the Commission may consider the issuance of an order without a hearing. To learn if the Commission will hold the public hearing, please call 793-1221 after November 14,2006. Additionally, a person may submit written comments regarding this application to the Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. Written comments must be received no later than 4:30 pm on November 23, 2006 except that if the Commission decides to hold a public hearing, written protest or comments must be received no later than the conclusion of the November 28,2006 hearing. If you are a person with a disabilitx ho may need a special modification in order to comment or to attend the public hearing, please cont t t e Commission's Special Assistant Jody Colombie at 793- 1221 before November 24, Published Date: Journal of Commerce 10/22/2006 Published date: The Arctic Sounder 10/19/06 AO# Journal 02714008 AO # Sounder 02714009 · JôúArnaLrCo&merce Alaska Oil & Gas Conservation Commissio Legal Notices FILE NO: Ad#: 00062366 . Nuiqsut 10#06-1426 AFFIDAVIT OF PUBLICATION ATTACH PROOF OF PUBLICATION HERE UNITED STATES OF AMERICA, STATE OF ALASKA, THIRD DISTRICT BEFORE ME, THE UNDERSIGNED, A NOTARY PUBLIC THIS DA Y PERSONALLY APPEARED Lara Bickford WHO, BEING FIRST DULY SWORN, ACCORDING TO THE LA W, SA YS THAT SHE IS THE Business Manager OF THE ALASKA JOURNAL OF COMMERCE PUBLISHED AT 301 ARTIC SLOPE AVENUE, SUITE 350, IN SAID THIRD DISTRICT AND STATE nl=' If a request for a hearing is not timely ALASKA AND THAT ADVERTISEMEhled, the Commission may consider OF WHICH THE ANNEXED IS A TRUE the issuance of an order without a heanng. To learn If the Commission COPY WHICH WAS PUBLISHED IN Sþwill hold the pUblic hearing, please PUBLicA TION APPEARING ON THE ~~~6793-1221 after November 14, Additionally, a person may submit written comments regarding this ap- plication to the Alaska Oil and Gas Conservation Commission at 333 West 7t,h Avenue, Suite 100, Anchor- AND THERE AFTER FOR 1 age, Alaska 99501. Written com- - ments must be received no later than CONSECUTIVE WEEK(S) AND THE 4:30 pm on November 23, 2006 ex- LAST PUBLICATION APPEARING ONcept that if the Commissio~ decides to hold a public heanng, wntten pro- test or comments must be received 10/22/2006 no later than the conclusion of the 22nd DAY OF OCTOBER 2006 November 28,2006 hearing.. .. If you are a person with a disability who may need a special modification in order to comment or to attend the public hearing, please contact the Commission's Special Assistant Jody Colombie at 793-1221 before Novem- ber 24, 2006. . John K. Norman Busmess Manager Chairman SUBSCRIBED AND SWORN BEFORE tub: 10/22/2006 THIS ~DA Y OF October 2006 · (') /I_-~- l) ~ ~\\\\\\II"111111 ~~\\~~N'S J:'j 1'///// ~ ~...........u..f"\ ~ ~,.. .. \.: ~ NOTARY PUBLIC STATE OF ALASKA !*./'.O't ...%,\ MY COMMISSION EXPIRES 10/2/10 æ ¡ "'.4~ ì_ .:- ª - . A ,,....- \c&... !/SLIC ./*$ ~~~ . ~ ~,.. . s ~ a;···..··~l't- §'~ "///l r ALAS~\\\\'" 1111111/11 ,,\\\\\: 10/22/2006 22nd DAY OF OCTOBER 2006 J?Lì ~ [) Lara t~kÍord \J 10#06-1426 Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conserva- tion Commission Re: The North Slope Borough (NSB) by letter dated September 14, 2006 has requested a hearing to consider a variance to allow use of gas metering equipment with measurement uncer- tainty greater than measurement sys- tems used previously. A natural gas transportation and dis- tribution system has been installed to carry natural gas produced in the Col- ville River Unit to the City of Nuiqsut. Gas for delivery will normally be sup- plied from ConocoPhillips' high-pres- sure gas lift system utilizing' a En- dress-Hauser (EH) vortex shedding meter. Alternatively, gas can also be supplied from ConocoPhillips' fuel gas system using a Rosemount (R) vortex shedding meter. Hydrocarbon measurement for cus- tody transfer must be in accord with the Petroleum Measurement Stan- dards of the American Petroleum In- stitute. Chapter 14 applies to gas measurement. Various metering de- vices have been approved for gas measurement, however vortex-shed- ding meters are not included. Orifice meters are widely used on the North Slope for gas measurement. When properly constructed and maintained these meters have a measurement un- certainty of +0.57%. According to the manufacturer's, the uncertainty of the EH meter is +1.0% and the R meter uncertainty is +1.375%. Regulation 20 MC 25.228 (j) allows the Com- mission, in its discretion, to grant a variance if the result is equal or im- proved measurement accuracy. The Commission has tentatively scheduled a public hearing on this matter for November 28, 2006 at 9:00 am at the Alaska Oil and Gas Conser- vation Commission at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. A person may request that the tentatively scheduled hearing be held by filing a written request with the Commission no later than 4:30 pm on November 8. 2006. I 02-902 (Rev. 3194) . Publisher/Original . Copies: Department Fiscal, Department, Receiving AO.FRM STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER ADVERTISING ORDER NO. INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED COPY OF ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE AO-02714008 F AOGCC 333 West 7th Avenue. Suite 100 Anchonu:re. AK 99..,01 907-793-1221 AGENCY CONTACT DATE OF A.O. R o M Jodv Colombie October 11. 2006 PHONE peN (907) 793 -12) 1 DATES ADVERTISEMENT REQUIRED: T o Journal of Commerce October 22, 2006 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: Advertisement to be published was e-mailed United states of America AFFIDAVIT OF PUBLICATION REMINDER State of ss INVOICE MUST BE IN TRIPLICATE AND MUST REFERENCE THE ADVERTISING ORDER NUMBER. A CERTIFIED COpy OF THIS AFFIDAVIT OF PUBLICATION MUST BE SUBMITTED WITH THE INVOICE. ATTACH PROOF OF PUBLICATION HERE. division. Before me, the undersigned, a notary public this day personally appeared who, being first duly sworn, according to law, says that helshe is the of Published at in said division and state of and that the advertisement, of which the annexed is a true copy, was published in said publication on the day of 2006, and thereafter for _ consecutive days, the last publication appearing on the _ day of . 2006, and that the rate charged thereon is not in excess of the rate charged private individuals. Subscribed and sworn to before me This _ day of 2006, Notary public for state of My commission expires STATE OF ALASKA . NOTICE TO PUBLISHER . ADVERTISING ORDER NO. ADVERTISING ORDER INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED COPY OF ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE AO-02714009 F AOGCC AGENCY CONTACT DATE OF A.O. R 333 W 7th Ave, Ste 100 o Anchorage, AK 99501 M Jody Colombie PHONE October 11, 2006 peN (907) 793 -] ?2 ] DATES ADVERTISEMENT REQUIRED: T The Arctic Sounder o October 19,2006 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: Advertisement to be published was e-mailed Type of Advertisement Legal[g o Display Classified DOther (Specify) SEE ATTACHED REF TYPE 1 VEN 2 ARD 3 4 FIN AMOUNT NUMBER I AOGCC, 333 W. 7th Ave., Suite 100 Anchorage, AK 99501 AMOUNT DATE I TOTALOF I PAGE 1 OF ALL PAGES$ 2 PAGES COMMENTS 02910 SY CC PGM LC ACCT FY NMR DIST LlQ 05 02140100 73451 2 3 ~ R~QUISITIONED ? '\ o ŒtowJ~ ~DIVISION APPROVAL: . . Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: The North Slope Borough (NSB) by letter dated September 14, 2006 has requested a hearing to consider a variance to allow use of gas metering equipment with measurement uncertainty greater than measurement systems used previously. A natural gas transportation and distribution system has been installed to carry natural gas produced in the Colville River Unit to the City of Nuiqsut. Gas for delivery will normally be supplied from ConocoPhillips' high-pressure gas lift system utilizing a Endress-Hauser (EH) vortex shedding meter. Alternatively, gas can also be supplied from ConocoPhillips' fuel gas system using a Rosemount (R) vortex shedding meter. Hydrocarbon measurement for custody transfer must be in accord with the Petroleum Measurement Standards of the American Petroleum Institute. Chapter 14 applies to gas measurement. Various metering devices have been approved for gas measurement, however vortex-shedding meters are not included. Orifice meters are widely used on the North Slope for gas measurement. When properly constructed and maintained these meters have a measurement uncertainty of ±0.57%. According to the manufacturer's, the uncertainty of the EH meter is ±1.0% and the R meter uncertainty is ±1.375%. Regulation 20 AAC 25.228 (j) allows the Commission, in its discretion, to grant a variance if the result is equal or improved measurement accuracy. The Commission has tentatively scheduled a public hearing on this matter for November 28,2006 at 9:00 am at the Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. A person may request that the tentatively scheduled hearing be held by filing a written request with the Commission no later than 4:30 pm on November 8, 2006. If a request for a hearing is not timely filed, the Commission may consider the issuance of an order without a hearing. To learn if the Commission will hold the public hearing, please call 793-1221 after November 14,2006. Additionally, a person may submit written comments regarding this application to the Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. Written comments must be received no later than 4:30 pm on November 23, 2006 except that if the Commission decides to hold a public hearing, written protest or comments must be received no later than the conclusion of the November 28, 2006 hearing. If you are a person with a disabilit}: ho may need a special modification in order to comment or to attend the public hearing, please con t Commission's Special Assistant lody Colombie at 793- 1221 before November 24, Published Date: Journal of Commerce 10/22/2006 Published date: The Arctic Sounder 10/19/06 AO# Journal 02714008 AO # Sounder 02714009 . . . ALASKA NEWSPAPERS INC. 301 CALISTA COURT, SUITE B ANCHORAGE, ALASKA 99518-3028 ~(907) 272-9830 * ~(907) 272-9512 Uf') (".1 21 4. \.".;' .' AK OIL & GAS CONSERVATION COMMITTEE JODY COLOMIE 333 W 7TH AVE, STE 100 ANCHORAGE, AK 99501 Date: October 23, 2006 CASE/PO: 02714009.AS INVOICE: AS311127 PAPER: ARCTIC SOUNDER AFFIDAVIT OF PUBLICATION UNITED STATES OF AMERICA, STATE OF ALASKA, THIRD DIVISION. BEFORE ME, THE UNDERSIGNED, A NOTARY PUBLIC THIS DAY PERSONALLY APPEARED SHANNON MOONEY WHO, BEING FIRST DULY SWORN, ACCORDING TO LAW, SAYS THAT SHE IS THE BILLING CLERK FOR: . THE ARCTIC SOUNDER, PUBLISHED AT ANCHORAGE IN SAID DIVISION THREE AND STATE OF ALASKA AND THAT THE ADVERTISEMENT, OF WHICH THE ANNEXED IS A TRUE COPY, WAS PUBLISHED IN SAID PUBLICATION ON 10/19/2006 AND THEREAFTER FOR A TOTAL OF LCONSECUTIVE ISSUE(S), THE LAST PUBLICATION APPEARING ON 10/19/2006, AND THAT THE RATE CHARGED THEREON IS NOT IN EXCESS OF THE RATE CHARGED TO PRIVATE INDIVIDUALS. STAMP "..."'"",, _........~\~A Rtl"'h"', :~'ò .......... ~'^'" :.;f:'....,,/. ··._'P'r '1, $(j ..' _,01ARY·. ~ ~:~ ..Ø)~ ~ . ..... : g ~ ~: 1"... N j;f ~ ¡: I PUo.\..'v <: . ~ ~ -«. ~ \SI ¡¡l if.. ~ ~ CI "" '?- ~.':: 1'1,%.... "::r~ Of ~':..:\.~~ .! .,'''''.t ....... ."...... "" "fon Exp\!e'" ........ "\\\\.\\.\\"....... . ~? SHANNON D. MOONEY BILLING CLERK, ALASKA NEWSPAPERS SUBSCRIBED AND SWORN TO ME ON October 23. 2006 {Jk ~'k11-óØiir CHRISTINA RITTER MY COMMISSION EXPIRES ON MARCH 24, 2009 I 02-902 (Rev. 3/94) . Publisher/Original . Copies: Department Fiscal, Department, Receiving AO.FRM STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER ADVERTISING ORDER NO. INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED COPY OF ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE AO-02714009 F AOGCC 333 West ih Avenue. Suite 100 A nchonHJe. A K 99';01 907-793-1221 AGENCY CONTACT DATE OF A.O. R o M Jodv Colombie October II. ).006 PHONE peN (907) 793 -12).1 DATES ADVERTISEMENT REQUIRED: T o The Arctic Sounder October 19,2006 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: Advertisement to be published was e-mailed United states of America AFFIDAVIT OF PUBLICATION REMINDER State of ss INVOICE MUST BE IN TRIPLICATE AND MUST REFERENCE THE ADVERTISING ORDER NUMBER. A CERTIFIED COPY OF THIS AFFIDAVIT OF PUBLICATION MUST BE SUBMITTED WITH THE INVOICE. ATTACH PROOF OF PUBLICATION HERE. division. Before me, the undersigned, a notary public this day personally appeared who, being first duly sworn, according to law, says that helshe is the of Published at in said division and state of and that the advertisement, of which the annexed is a true copy, was published in said publication on the day of 2006, and thereafter for _ consecutive days, the last publication appearing on the _ day of , 2006, and that the rate charged thereon is not in excess of the rate charged private individuals. Subscribed and sworn to before me This _ day of 2006, Notary public for state of My commission expires Public Notice . . Subject: Public Notice From: Jody Colombie <jody_colombie@admin.state.ak.us> Date: Thu, 12 Oct 2006 15:53:18 -0800 To: detIDis.c~~~@ala~l{~jouma1.çot)1 Please publish on 10/22/06. Jody Ad Order form Content-Type: application/msword Content-Encoding: base64 Content- Type: application/msword Nuiqsut Gas Metering.doc Content-Encoding: base64 1 of 1 10/12/20063:53 PM Re: Public Notice . . Subject: Re: Public Notice From: Dennis Caasi <dennis.caasi@alaskajourna1.com> Date: Thu, 12 Oct 2006 16:13:17 -0800 To: J ody Col0111bie-<j ody _colombie@åd:~in.sta.te.ak;tJs> Received 10/12/2006.... On 10/12/06 3:53 PM, "Jody Colombie" <jody co1ombie@admin.state.ak.us> wrote: Please publish on 10/22/06. Jody I of 1 10/12/20064:36 PM Public Hearing Notice . . Subject: Public Hearing Notice From: Jody Colombie <jody_colombie@admin.state.ak.us> Date: Thu, 12 Oct 2006 15:51:09 -0800 To:ggrant@ålaskanewspª,pers.com I am sorry for the delay, hopefully you can still get it in. Jody Content-Type: applicationlmsword Order form.doc Content-Encoding: base64 Content- Type: applicationlmsword Nuiqsut Gas Metering.doc Content-Encoding: base64 I of 1 10/12/20063:53 PM . Mary Jones XTO Energy, Inc. Cartography 810 Houston Street, Ste 2000 Ft. Worth, TX 76102-6298 George Vaught, Jr. PO Box 13557 Denver, CO 80201-3557 John Levorsen 200 North 3rd Street, #1202 Boise, 10 83702 Mark Wedman Halliburton 6900 Arctic Blvd. Anchorage, AK 99502 Ciri Land Department PO Box 93330 Anchorage, AK 99503 Gordon Severson 3201 Westmar Cr. Anchorage, AK 99508-4336 James Gibbs PO Box 1597 Soldotna, AK 99669 Richard Wagner PO Box 60868 Fairbanks, AK 99706 North Slope Borough PO Box 69 Barrow, AK 99723 David McCaleb IHS Energy Group GEPS 5333 Westheimer, Ste 100 Houston, TX 77056 Jerry Hodgden Hodgden Oil Company 408 18th Street Golden, CO 80401-2433 Kay Munger Munger Oil Information Service, Inc PO Box 45738 Los Angeles, CA 90045-0738 Schlumberger Drilling and Measurements 2525 Gambell Street #400 Anchorage, AK 99503 Ivan Gillian 9649 Musket Bell Cr.#5 Anchorage, AK 99507 Jack Hakkila PO Box 190083 Anchorage, AK 99519 Kenai National Wildlife Refuge Refuge Manager PO Box 2139 Soldotna, AK 99669-2139 Cliff Burglin PO Box 70131 Fairbanks, AK 99707 Williams Thomas Arctic Slope Regional Corporation Land Department PO Box 129 Barrow, AK 99723 . Mona Dickens Tesoro Refining and Marketing Co. Supply & Distribution 300 Concord Plaza Drive San Antonio, TX 78216 Richard Neahring NRG Associates President PO Box 1655 Colorado Springs, CO 80901 Michael Parks Marple's Business Newsletter 117 West Mercer St, Ste 200 Seattle, WA 98119-3960 Baker Oil Tools 4730 Business Park Blvd., #44 Anchorage, AK 99503 Jill Schneider US Geological Survey 4200 University Dr. Anchorage, AK 99508 Darwin Waldsmith PO Box 39309 Ninilchick, AK 99639 Penny Vadla 399 West Riverview Avenue Soldotna, AK 99669-7714 Bernie Karl K&K Recycling Inc. PO Box 58055 Fairbanks, AK 99711 Public Notice North Slope Borough Nuiqsut . . Subject: Public Notice North Slope Borough Nuiqsut From: Jody Colombie <jody_colombie@admin.state.ak.us> Date: Thu, 12 Oct 2006 16:20:40 -0800 To: undisclosed- 'pients:; Bec: Cynthia B M r <bren_mciver <ro bert _ mintz@law.state.ak.us>, Chris <hubbletl@bp.com>, So Stewman <Ste <ecolaw@trus r t 1 trmjrI <knelson@ leu· s.co , cbod oddy@usibelli.com>, Mark Dalton <mark.dalt @hdrinc.c Shannon Donnelly <shannon.donneHy@c Worcester" <mark.p.worcester@conocophillips.com>, Bob <bob@in t <wdv@dnr.state.ak.us>, tjr <tjr@dnr.state.ak.us>, bbritch <bbritch <mjnelson@purvingertz.com>, Charles 0' ell <charles.o'donnell@ <SkilleRL@BP.com>, "Deb J. Jo onesD6@ m>, , n R. <RossbeRS@BP.com>, Lois < inletkeeper.org>, D ss < Pospisil <PospisG@BP.com>," ancis S. So r" < erFS <Mikel.Schultz@BP.com>, "Nick W. Glover' Glove W <KleppiD P.com>, "Janet D. Platt" <PlattJD@BP.co <JacobsRM@BP.com>, ddonkel <ddonkel@cfl.rr.com>, mckay <mc ci. arbara F Fullmer <barbara.f.fullmer@conocophillips.com>, Charles Barker <barker@usgs.gov> , doug_schultze <doug_schultze@xtoenergy.com>, Hank Alford <hank.alford@exxonmobil.com>, vac <yesnoI@gci.net>, gspfoff <gspfoff@aurorapower.com>, Gregg Nady <gregg.nady@s e l.com>, Fred Steece <fred.steece@state.sd.us>, rcrotty <rcrotty@ch2m.com>, jejones <jejones@aurorapower.com>, dapa <dapa@alaska.net>,jroderick <jroderick@gci.net>, eyancy <eyancy@seal-tite.net>, "James M. Ruud" <james.m.ruud@conocophillips.com>, Brit Lively <ma ska@ >, jah <jah@dnr.state.ak.us>, buonoje <buonoje@bp.com>, Mark Hanley <mar _ anley@anadarko.com>, 10ren_Ieman <loren_Ieman@gov.state.ak.us>, Julie Houle <julie)1oule@dnr.state.ak.us>, John W Katz <jwkatz@sso.org>, tablerk <tablerk@unocal.com>, Brady <brady@aoga.org>, Brian Havelock <beh@dnr.state.ak.us>, bpopp <bpopp@borough.kenai.ak.us>, Jim White <jimwhite@satx.rr.com>, "John S. Haworth" <john.s.haworth@exxonmobil.com>, marty <marty@rkindustrial.com>, ghammons <ghammons@aol.com>, rmc1ean <rmclean@pobox.alaska.net>, mkm7200 <mkm7200@aol.com>, Brian Gillespie <itbmg@uaa.alaska.edu>, David L Boelens <dboelens@aurorapower.com>, Todd Durkee <TDURKEE@KMG.com>, Gary Schultz <gary_sch .state.ak.us>, ancier <RANCIER@petro-canada.ca>, Brandon Gagnon <bgag brenala m>, Pa w <pmwinslow@forestoil.com>, Sharmaine Copeland <copelasv@bp.co Kristin D <kristin_dirks@dnr.state.ak.us>, Kaynell Zeman <kjzem marath <John.Tower@ei oe.gov>, Bill Fowler <Bill_Fowler darko.C , Scott <scott.cranswick@ s.gov>, Brad McKim <mckimbs@BP.com>, Steve Lambe <lambes@unocal.com>,jacknewell <jack.newell@acsalaska.net>, James Scherr <james.scherr@mms.gov>, n1617@conocophillips.com, Tim Lawlor <Tim_Lawlor@ak.blm.gov>, Lynnda Kahn <Lynnda_Kahn@fws.gov>, Jerry Dethlefs <Jerry.C.Dethlefs@conocophillips.com>, crockett@aoga.org, Tamera Sheffield <sheffield@aoga.org>, Jon Goltz <Jon.Goltz@conocophillips.com>, Roger Belman <roger.belman@conocophillips.c >, Mindy Lewis <mlewis@brenalaw.com>, Kari Moriarty <moriarty@aoga.org>, Patty Alfaro <pal yahoo. com>, Jeff <smetankaj@unocal.com>, Todd Kratz <ToddKratz@che com>, Gary Rogers <gary_rogers@revenue.state.ak.us>, Arthur Copoulos <Arthur_ oulos@dnr.state.ak.us>, Ken <ken@secorp-inc.com>, Steve Lambert <salambert cal.com>, Joe Nicks <news@radiokenai.com>, Jerry McCutcheon <susitnahydronow@yahoo.com>, II Walker <bill-wwa@ak.net>, Iris Matthews lof2 10/12/20064:21 PM Public Notice North Slope Borough Nuiqsut . . <Iris_Matthews@legis.state.ak.us>, Paul Decker <paul_decker@dnr.state.ak.us>, Rob Dragnich <rob.g.dragnich@exxonmobil.com>, Aleutians East Borough <admin@aleutianseast.org>, Marquerite kremer <marguerite_kremer@dnr.state.ak.us>" Mike Mason <mike@kbbi.org>, Garland Robinson <gbrobinson@marathonoil.com>, Cammy Taylor <Camille_Taylor@law.state.ak.us>, Winton GAubert <winton _ aubert@admin.state.ak.us>, Thomas E Maunder <tom _ maunder@admin.state.ak.us>, Stephen F Davies <steve_davies@admin.state.ak.us>, Keith Wiles <kwiles@marathonoil.com>, Deanna Gamble <dgamble@kakivik.com>, James B Regg <jim_regg@admin.state.ak.us>, Catheri Foerster <cathy _foerster dmin.state.ak.us>, Bób <Bob@fairweather.com>, gregory mica <micallef@cl ·re.net>, Lau liphant <laura_sillip dnr.s .us>, David Steingreaber <david.e.steingreaber@exxonmo il. , akpratts@acs t rt Campbell . <Robert.Campbell@reuters.com>, St Moothart <steve_m tate.ak.us>, Anna Raff <anna.raff@do\\jones.com>, Cliff Posey <cliff@posey.or <pau ml.com>, Sonja Franklin <sfranklin6@blomberg.net>, Meghan Pow < owell gy.com>, Temple Davidson <temple_davidson@dnr.state.ak.us>, Walter therly <WFeatherly@PattonBoggs.com> : Content-Type: application/pdf 'INS Borough gas metering.pdf . b 64 ' Content-Encodmg: ase 20f2 10/12/20064:21 PM #2 Request to recieve mailings . . Subject: Request to recieve mailings From: Joe Daniels <jdaniels@LCMF.com> Date: Thu, 28 Sep 2006 08:43:13 -0800 To: jody _ colombie@admin.statê.ak.us CC: Dave.Hodges@north-slope.org Jody; LCMF represents the North Slope Borough regarding their request to the AOGCC for a determination regarding metering of natural gas between the Alpine production facility and Nuiqsut, Alaska. Please include me on all correspondence/determinations in this matter. Please use this email address. Thank you for your help, Joe Daniels LCMF 1 of 1 9/28/2006 9:57 AM #1 · . NORTH SLOPE BOROUGH DEPARTMENT OF CAPITAL IMPROVEMENT PROGRAM MANAGEMENT 3000 est., Suite N201 Anchorage AK, 99503 Phone: (907) 561-6605 Fax: (907)561-0112 SepternberI4,2006 Mr. John K. Norman Commissioner Alaska Oil and Gas Conservation Commission 333 West 7th Ave., Suite 100 Anchorage, Alaska 99501 Re: Nuiqsut Natural Gas Pipeline Request for Consideration of Variance under 20 AAC 25.228b Nuiqsut, Alaska Dear Mr. Norman: On behalf of the North Slope Borough (NSB), I request a variance to requirements of custody transfer equipment under 20 AAC 25.228, as allowed under 20 AAC 25.228 0). Specifically, this request is to allow the use of non, certified gas metering equipment for custody transfer and royalty measuring. As the circumstances in this case will differ slightly from the allowable criteria for a variance, which are described in detail below, I also request a hearing before the commission to discuss this matter with you if necessary. Background For several years now, the NSB, working in conjunction with Kuukpik Corporation of Nuiqsut, the City of Nuiqsut and ConocoPhillips Alaska, has been Î11 the process of constructing a natural gas tran$portation and distribution system (NNGP) for the benefit of the community of Nuiqsut. The NNGP originates at the ConocoPhiUips Alpine production facility, where the gas is conditioned and sent down a transmission pipeline to a receiving facility in Nuiqsut. Weare at last nearly complete with all phases of construction, and anticipate startup and commissioning of the system sometime in late summer/early fall of this year. . Mr. John K. Norman September 14, 2006 Page 2 . The system design assumed that custody transfer and royalty measuring would take place upstream of the conditioning facility, and outside of the operational area of the NNGP. As such, all gas metering within the operational area ofthe NNGP is for local flow monitoring and vortex meters are used. The system is designed to condition high pressure lift gas; however, field fuel gas may be metered directly into the transmission pipeline and bypass the conditioning facility when conditions will support the higher dew point of the field gas. Vortex meters are in place for either occurrence. Earlier this year, ConocoPhillips informed us that the royalty measuring point for gas entering the NNGP would necessarily be within the NNGP operational area, utilizing the existing meters located on the upstream side of conditioning. Weare told however, that the vortex meters are not presently certified for custody transfer as required under 20 AAC 25.228. Although it is preferred to continue with the vortex meters, the alternative would be to change out to coriolis meters. Changing out these meters at this late a stage in the development of the NNGP would result in startup delays due to lead time issues with the equipment, and reengineering. Any delay at this time would likely postpone a system startup until spring/summer of 2007. 20 AAC 25.228 G) requires that, for a vari;;mce to be allowed, the proposed equipment must provide equal or improved accuracy in measurement, and, in this case, the accuracy of the vortex meter is not quite to the level of the alternative meter: EXISTING METER: Endress-Hauser 70H Accuracy;:::: +/- 1.0% Repeatability = +/- 0.2% ALTERNATE METER: MicroMotion D-Series Coriolis Accuracy = +/- 0.65% Repeatability = +/- 0.2% EXISTING METER: Rosemount 8800C Vortex Accuracy = +/- 1.375% Repeatability = +/. 0.1 % ALTERNATE METER: MicroMotion Elite Coriolis Accuracy = +/- 0.35% Repeatability = +/- 0.2% . Mr. John K. Norman September 14, 2006 Page 3 . The comparison above indicates accuracy differentials between each of the existing vortex meters and their preferred alternatives. The alternative meter at the high pressure lift gas inlet has an accuracy differential of +/-0.35%, and the alternative meter at the fuel gas inlet has an accuracy differential of +/-1.025% from the existing meter. Some perspective must now be put on to the potential impact of this difference in accuracy (as it is the intention of ConocoPhillips to supply the NNGP using lift gas 100% of the time, we will base our request on the accuracy differential associated with the Endress-Hauser meter). Specifically, based on current royalty rates provided to us by ConocoPhillips, and assuming that all gas will be supplied through the lift gas meter, the highest probable impact of the specified difference in meter accuracy would be +/-$1.17/day in royalty. This figure was derived as follows: Maximum daily volume to NNGP (per agreement) = 500mcf/day Anticipated highest value gas = $4.00/mcf Maximum State royalty = 13.5% Gross royalty (estimated - all leases) = 16.67% To calculate daily max royalty = gas volume x gas price x royalty = 500mcf/day x $4/mcfx 13.5% = $270.00 (State) = 500mcf/day x $4/mcfx 16.67% = $333.33 (All leases) To calculate max impact to royalty of vortex meter accuracy differential = max royalty x accuracy differential = $270.00/day x +/-0.35% = +/-$O.95/day (State) = $333.33/day x +/-0.35% = +/-$1.17/day (All leases) The following is provided for a better understanding of the equipment and the intended plan of operation for using the vortex meters for custody transfer: Installation The gas meter is installed in a vertical orientation ona straight run of horizontal piping that is free of side taps, valves or any other obstructions. There are 31 diameters of upstream straight run piping and 5 diameters of downstream straight run piping. The manufacturer's recommended mininlum upstream straight run piping is 15 diameters and the recommended minimum downstream straight run piping is 5 diameters. A pressure transmitter is installed in a free draining orientation 10 diameters downstream of the meter. The pressure transmitter was installed specifically to provide flowing gas pressure to calculate flow rate at standard conditions. . Mr. John K. Norman September 14, 2006 Page 4 . A thermowell is installed 14 diameters downstream of the meter. There is a spring loaded 4 wire platinum 1000hm RTD installed in the thermowell. The RTD leads are connected to a temperature transmitter. The temperature transmitter was installed specifically to provide flowing gas temperature to calculate flow rate at standard conditions. Process Information Process Fluid Specific Gravity Viscosity Compressibility Process Pressure Operating Operating Nonnal Maximum Normal Maximum Minimum Maximum Process Temp Flow Rate Control System Hydrocarbon Gas 0.82 0.024cP 0.649 2200 psig 3176 psig 92 Deg F 180 Deg F 10,166 SCFH 70,000 SCFH The analog data from the flow meter, pressure and temperature transmitters are wired to the existing Moore AP ACS control system. The calculations required to convert actual condition flow rate to standard condition flow rate Will be accomplished Within the control system. The non-resetting flow total for the standardized flow rate Will be programmed in the control system. Unintended changes to the existing programming are prevented by software password protection. Any modifications require approval by all interested parties and the acting Flow Measurement Specialist before being implemented. All modifications require an Automation Checklist Form that is historized for the duration of the meter's operation. A month end report Will be generated and distributed to the proper accounting parties. The report will include the dates valid for the report, the totalized gas flow, any flow rate corrections and the reasoning behind those corrections. Calculations Vortex meters provide a volumetric flow rate based on actual flowing conditions much like a turbine meter. Using this reasoning, the standard condition volumetric flow rate will be calculated from the operating condition flow rate using the volumetric equations contained Within AGA Report 7, Second Edition April 1996, Section 6. These equations are currently being used on the drillsite test separator gas metering where vortex meters are in operation. . Mr. John K Norman September 14, 2006 Page 5 . Calibration The pressure and temperature transmitters will be calibrated once a year against a NIST traceable standard. The flow meter has provisions for a known flow rate generation input to test the functionality of the meter electronics. This test will be performed at a minimum of once a year or any time the flow rate results are suspect. The AOGCC and all interested parties will be invited to witness and be duly informed of the schedule for the annual calibration of the metering and support transmitters. The calibration reports will be provided to the AOGCC and all interested parties. Every three years the flow meter will be replaced with a recently (re )certified in kind replacement meter. The removed meter will be scheduled to be returned to the manufacturer to be recertified. The AOGCC and all interested parties will be invited to witness this recertification. Results of the recertification will be provided to AOGCC and all interested parties. Maintenance The metering system will be maintained per the manufacturer's recommended maintenance schedule, or as required for repair. Adequate spare parts will be locally stocked to minimize time required for repair. Any maintenance, repair, or calibrations performed on the metering system will be promptly reported to the AOGCC and all interested parties. Vortex Meter Specifications Manufacturer Model Number Meter Size Output Mode Calibrated Range Accuracy Repeatability Endress-Hauser 70H-S2590A20A2E100 1" 1500# (0.957" Bore) Analog, 4-20mA 22.07 to 320 ACFH 1 % of flow for Reynolds Number great than 20,000 (Re = 140,000 at 22.07 ACFH) +/- 0.2% of rate Pressure Transmitter Specifications Manufacturer Model Number Output Mode Calibrated Range Accuracy Stability Rosemount 3051 TG4A2B21AM5B4K5Q4Q8 Analog, 4-20mA 0-3200 psig +/- 0.065% of span +/- 0.125% of upper range limit (4000 psig) for 5 years . Mr. John K Norman September 14, 2006 Page 6 . Temperature Transmitter Specifications Manufacturer Rosemount Model Number 3144PDIAIK5M5XI Q4 Output Mode Analog,4-20mA Calibrated Range -50 to 180 Deg F Accuracy +/- 0.226 Deg F Stability +/- 0.1 % of reading for 2 years Temperature Element Specifications Manufacturer Model Number Output Mode Measurement Range Accuracy Stability Rosemount 0068N2I C30N090E5 4 Wire 100 Ohm Platinum RID -58 to 752 Deg F +/- 0.54 Deg F at 32 Deg F +/- 0.11 % maximum ice point shift In 1,000 hours Please give this request your attention. The potential impacts to royalty income from using the existing meters are nothing, especially in comparison to the cost in time to the project, and corresponding delay in providing natural gas to Nuiqsut that would result if the meters are to be changed out at this time. I believe that the facts presented above should merit a variance to 20 AAC 25.228, or further discussion on the matter at least. I will make myself and any others beneficial to the discussion, available at your convenience. O~~~ David Hodges Program Manager North Slope Borough, CIPM cc: Tom Maunder, AOGCC Joe Daniels, LCMF Steve Landis, ConocoPhillips Alaska