The schedule has slipped a year for ConocoPhillips’ big Willow oil project on the North Slope.
A decision by the U.S. Bureau of Management to prepare a Supplemental Environmental Impact Statement, or SEIS, for the project will push back regulatory approvals for Willow until later in 2020 and ConocoPhillips itself said it needs more time for further test drilling on the prospect, which is in the northeast the National Petroleum Reserve-Alaska.
The project site is about 30 miles west of the producing Alpine oil field, which is on state lands just east of the boundary of the federal reserve.
BLM said last Monday is will do the supplemental document based on changes in the project configuration by the company. The agency, which manages the petroleum reserve, issued a draft EIS in October and the SEIS essentially replaces that with new information added. In a press release BLM said it expects to have the SEIS completed in draft form later this spring.
Willow is expected to produce 130,000 barrels per day if it is built. It is now expected to begin production in 2026, a ConocoPhillips spokeswoman said Tuesday. The project cost is estimated at $4 billion to $5 billion based on an estimated 450 million to 800 million barrels of reserves, the company has said.
The main change involves dropping a plan to build an offshore artificial gravel island in shallow offshore waters near the coast of the petroleum reserve to unload large modules that would be shipped by barge. The revised plan is to unload the barges at an existing dock at Oliktok Point east of the NPR-A.
While the BLM decision effectively delays the agency’s final approval until late 2020 ConocoPhillips had meanwhile decided to push back the project schedule to gather additional information about Willow’s reservoir, company spokesperson Patty Sullivan said in e-mail.
“We have moved the anticipated start date back approximately one year from the date in the DEIS,” to about 2026, Sullivan said.
“The reason for the change is our decision to gather another round of appraisal data in the 2020 winter season. We believe we need additional information to better understand the geology and reservoir characteristics of the formation before making a final investment decision,” she said in the e-mail.
On the change in the artificial island plan, Sullivan said, “This new option eliminates the concerns from North Slope communities about the gravel island’s potential impacts to marine mammal subsistence activities. It also reduces the amount of gravel needed for the project. It reduces the size of the (gravel) mine site and amount of mining activity.”
Unloading at Oliktok Point further east, however, will involve moving the modules a greater distance overland on winter ice roads and across the Colville River on an ice bridge, which would have to be sturdy enough to accommodate the heavy weights of the modules.
Large oilfield process modules for North Slope projects are commonly built at fabrication sites in more temperate climates, often in Asia, and then shipped by barge through the Bering Strait and the Alaskan Beaufort Sea to a point on the coast where they can be unloaded. They are unloaded and moved overland, often for several miles, to the project location.
Willow is inland in the northeast NPR-A and about 30 miles west of the producing Alpine field, which is on state of Alaska lands near the Colville River delta. The river forms the boundary between state lands and federal lands in the petroleum reserve.
ConocoPhillips also has two smaller projects also in NPR-A east of the Willow location. GMT-1 is now in production with expected peak production of 25,000 barrels per day. A second project, GMT-2, is now in construction and will begin production in 2021 with an expected peak of 35,000 barrels per day to 40,000 barrels per day.