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AOGCC approves Hilcorp non-custody transfer meter for pilot
Kristen Nelson Petroleum News
The Alaska Oil and Gas Conservation Commission has approved, with numerous conditions, a request from Hilcorp Alaska for use of non-custody transfer meters for power sold to a Duck Island unit third-party data center pilot project.
In a March 13 decision the commission said no extensions will be granted and if the pilot project extends beyond 5 years, the system used to measure the gas volume must be upgraded to custody transfer standards.
Hilcorp is the owner and operator of the Duck Island unit and uses gas as fuel at the Endicott oil and gas field within the unit. The company told the commission there is excess power generation capacity at the Endicott facility and it proposes to sell excess power to the third-party data center.
The issue addressed by the commission's order is that gas measurement for Endicott power generation uses "existing classical style venturi tube meters" for a volume of gas included in the company's monthly gas disposition report for which custody transfer measurement quality meter are not required.
The commission said Hilcorp does not have the ability to segregate gas used for power generation for the third-party data center from gas used to generate power for Endicott facilities.
Relevant AOGCC regulations refer to the 1998 revision of the American Petroleum Institute Manual of Petroleum Measurement Standards which does not recognize venturi meters for custody transfer. The commission said venturi meters were recognized in the 2023 edition of the API MPMS, but said "venturi tube measurement equipment at Endicott does not meet AOGCC custody transfer measurement requirement nor the provisions of" the 2023 edition of API MPMS.
Circumstances at Endicott The commission said Hilcorp has estimated that less than 0.15% of total gas produced at Endicott will be used for power production at the data center during the pilot. The company has informed the commission that the data center has been installed but is not yet connected to the power supply.
The company proposes to indirectly measure the gas consumed to provide data center power by calculation based on "the measured total volume of gas consumed at Endicott for power generation and a ratio of the measurements of the electricity consumed by the third-party data center and total electricity produced at Endicott."
There are electrical meters to measure power consumed at each Endicott facility power generating turbine and at the third-party data center. The data center will provide Hilcorp with weekly power consumption reports.
The Endicott pilot project is the first such application under AOGCC's jurisdiction, the commission said, and it "has no experience nor jurisdiction regarding electrical meters."
The commission concluded that because the data center was a temporary pilot project and involves a small volume of gas it warrants "conditional approval of a waiver to use non-custody transfer meters."
Conditions The commission imposed numerous conditions:
*The pilot project will not exceed 5 years;
*The equipment must be as described in Hilcorp's application and the company must obtain commission approval before making changes to equipment or measurement methodology;
*Numerous inspections and calibration checks are required;
*24-hour notification to the commission is required for witness opportunities of "function checks, calibrations and inspections of the venturi measurement system prior to start/restart of the third-party data center and any equipment changes";
*Equipment and records that must be available for inspection are specified;
*Copies of calibration reports required within 7 days of completion, with contents of reports specified; and
*Electrical power consumption reports must be available upon request.
--KRISTEN NELSON
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