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Hilcorp files lease plan, private easements at former MGS unit
Kristen Nelson Petroleum News
Hilcorp Alaska is in the process of determining if a known gas accumulation in Cook Inlet north of the Baker platform at the former Middle Ground Shoal unit is commercial and obtaining easements on existing platforms and pipelines to allow existing facilities to be used to host wind, solar or CCUS (Carbon Capture, Usage and Storage) projects.
Wells at the Middle Ground Shoal platforms have been shut-in since the company discovered a leak in a fuel gas line in April 2021. Hilcorp had been evaluating the cost to repair or replace the fuel gas line and when it submitted its proposed plan of development for the unit to the Alaska Department of Natural Resources, Division of Oil and Gas in April, it said it had determined the cost to repair or replace the fuel gas line was not economic as a standalone project.
Then at the end of May (see story in June 11 issue of Petroleum News) Hilcorp withdrew the proposed POD for the Middle Ground Shoal unit and proposed instead that the unit be voluntarily terminated. The company said it would relinquish two associated oil and gas leases, while requesting a suspension of operations/production for three other leases associated with platforms A, C and Baker, allowing the company to evaluate a known natural gas accumulation north of the Baker platform.
When the division issued a decision on Hilcorp's proposal at the end of June, it required annual lease plans of development, due each Sept. 1.
Along with its first lease plan of operations, Hilcorp also filed for a private non-exclusive easement for leases and infrastructure at the former Middle Ground Shoal unit.
In a Sept. 14 public notice the division said comments are being accepted through Oct. 13 on the applications, available on the division's website, https://dog.dnr.alaska.gov/Newsroom.
Field studies In its public notice the division said Hilcorp was requesting authorization for field studies "to determine the potential for future production on three oil and gas leases in Cook Inlet" formerly part of the Middle Ground Shoal unit "and to consolidate existing easements associated with the former MGSU."
Hilcorp said various field studies would be conducted "to determine the potential for future production on ADLs 17595, 18754 and 18756." The company said it would provide annual updates to the division beginning no later than April 1, 2024, and said it planned to conduct a field study on the exploration area in the Middle Ground Shoal "to identify potential drilling targets."
It will also evaluate the potential to drill from the Baker platform "or whether a new exploration/production platform would be required," and said it would evaluate the costs of constructing a new drilling and production platform, which, if built, would likely require new pipelines to shore.
Included in the study is looking at reactivating platform A.
Prior to the April 2021 shut-in, MGS had been producing from the A and C platforms, installed in 1964 and 1967, respectively. The other two platforms at MGS, Baker and Dillon, were no longer in production.
Consolidated easement In its application for easement, Hilcorp said the purpose was to consolidate five non-exclusive pipeline easements; support continued use of Baker, A and C platforms "in connection with continued oil and gas activities" for the three retained leases; establish an integrated utility corridor between the three platforms and Dillon and shore; provide for potential use of existing platforms "for other beneficial purposes," which, the company said, include but are not limited to research and development of offshore wind, tidal energy and CCUS.
The company requested a 25-year easement duration, subject to termination if Hilcorp or other third parties fail to use lands or existing platforms by Oct. 30, 2038, and that failure continues for at least 12 consecutive months.
Hilcorp said it intends to provide reasonable access to third parties such as universities, utilities, national laboratories, private entities and public agencies "for research, development, and implementation of tidal, wind and CCUS projects, as well as marine mammal and environmental research."
Hilcorp said this is the primary purpose of the requested easement and the focus for the first 10 years.
"Hilcorp's role would not be as an alternative energy project developer or independent power producer, bur rather as site host and provider of support/logistical activities," the company said.
Platforms Hilcorp said the consolidated easement for lands associated with the Dillon platform would provide the company with land use authorization allowing use of the Dillon platform "structure and associated infrastructure for other beneficial purposes (including, but not limited to, research and development of offshore wind, tidal energy and CCUS)."
The lands associated with A, C and Baker platforms, which would be in SOP, suspension of operations and production, terms and conditions of the retained leases would "continue to apply and control in connection with Hilcorp's oil and gas operations" until termination of the leases, and after termination of the leases terms of the consolidated easement would apply, allowing use of the SOP platforms and infrastructure for other beneficial purposes, as with the Dillon platform.
--KRISTEN NELSON
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