Hilcorp asks data center gas metering

Kristen Nelson

Petroleum News

Hilcorp Alaska has applied to the Alaska Oil and Gas Conservation Commission for approval to use non-custody transfer meters at the Duck Island unit for measurement of natural gas used to generate power for a third-party data center.

In its application Hilcorp said this is a pilot project "designed to be a material first step in a broader effort to monetize Alaska's stranded natural gas resource."

The company said the pilot will be small scale, 1.3 million standard cubic feet per day, and last just 4-5 years, requiring "a non-traditional tailored approach to achieve project feasibility."

The gas measurement system in use at the Duck Island unit reports fuel gas use to the state. Hilcorp is requesting permission to use "existing power turbine gas measurement venturi meters, in combination with power measurement for custody transfer of gas to the datacenter for royalty payment purposes."

Hilcorp said if the project extends beyond 5 years, it commits to bringing the measurement system up to API standards.

The company said it believes its proposed approach would be appropriate as gas would be used entirely within the unit for power generation and will use less than 0.15% of gas produced.

The project will be a datacenter at the Endicott Satellite Drilling Island with the datacenter tied to a transformer and power consumption measured locally.

AOGCC said its regulations require measurement equipment in accordance with relevant parts of the API Manual of Petroleum Measurement Standards and said Hilcorp acknowledges that use of the venturi meters in existence at Endicott deviates from the manual, requiring a waiver.

A tentative hearing has been scheduled for Jan. 16 at 10 a.m. at the commission's Anchorage offices, with call-in available at 907-202-7104 conference ID 518 816 779#. The commission said if a request for a hearing is not filed by 4:30 p.m. Dec. 23, it may issue an order without a hearing. To find if a hearing has been scheduled, call 907-793-1223 after Dec. 24.

--KRISTEN NELSON