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Hilcorp applies for exemption for CNG used at Milne Point unit
Kristen Nelson Petroleum News
Hilcorp Alaska has applied to the Alaska Oil and Gas Conservation Commission for a waiver of the commission's regulations for use of compressed natural gas outside the Milne Point unit boundary by CNG-powered MPU vehicles.
In an April 30 notice AOGCC said the waiver would be from regulations requiring sales metering of CNG that leaves the unit.
In its April 11 waiver request, Hilcorp said it is modifying Milne Point unit vehicles to operate on dual fuels, with CNG the primary fuel and unleaded gasoline or diesel the secondary fuel.
"The CNG being used as fuel is produced at the MPU facility and produces fewer emissions including reduced GHG emissions than a gasoline or diesel fuel. All unleaded gasoline and diesel being used within the MPU is imported from Fairbanks," Hilcorp told the commission.
Two vehicles are operating on CNG, the company said, and it plans to install dual fuel conversion kits in unit-owned vehicles and eventually in heavy equipment, including buses.
CNG-fueled vehicles are currently confined to use within the unit, Hilcorp said, but it hopes to have up to 10 CNG vehicles in operation by the end of the year "with transport to and from Deadhorse approved."
Severed from unit The issue, AOGCC said, is that when CNG-powered vehicles leave the unit, "the gas is severed from the unit and by regulation is required to be metered through a sales meter."
The waiver Hilcorp applied for would allow CNG-powered vehicles to leave the unit on unit business.
The commission has tentatively scheduled a hearing on the request for June 13 at 10 a.m. but said if it does not receive a timely request that the hearing be held, it may issue an order without a hearing. Information on whether the hearing will be held may be obtained by calling the commission at 907-793-1223 after May 22.
Previous waiver In December the commission issued a waiver on a similar request, this from Hilcorp North Slope for propane-fueled vehicles at the Prudhoe Bay unit. In that decision the commission said that it waived the requirement for transfer quality metering of the propane by PBU-owned vehicles which leave the unit boundaries "for purposes related to PBU operations."
In its Milne Point unit request, Hilcorp said examples of MPU CNG-powered vehicles leaving the unit on unit business include: driving to another operator's asset to borrow or purchase a tool for use in unit operations; driving to Deadhorse to transport equipment and passengers; responding to emergencies on the Prudhoe/Kuparuk Spine Road or at other operator's assets or to assist North Slope residents; assisting governmental and regulatory agencies with transportation.
--KRISTEN NELSON
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