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Exxon exec touts Point Thomson project

$4B project expected to produce 10,000 barrels of oil daily

Posted: August 3, 2014 - 12:11am
Karen Hagedorn, Alaska production manager for ExxonMobil, speaks at the Chamber of Commerce Luncheon at the Juneau International Airport on Thursday.  Marlena Sloss | Juneau Empire
Marlena Sloss | Juneau Empire
Karen Hagedorn, Alaska production manager for ExxonMobil, speaks at the Chamber of Commerce Luncheon at the Juneau International Airport on Thursday.

“Point Thomson, the next step in Alaska’s energy history.”

That’s how Karen Hagedorn, the Alaska production manager for ExxonMobil, described the current project happening on the North Slope during Thursday’s Juneau Chamber of Commerce luncheon. Point Thomson is a $4 billion project that is expected to produce 10,000 barrels of oil per day upon the project’s completion, which is expected to be early 2016.

Though Point Thomson is an extensive — and expensive — project construction-wise, Hagedorn characterized it as an “initial production system.” That means Point Thomson is simply the foundation upon which something much larger and more profitable can be built.

“What we are establishing is the critical infrastructure for future development,” Hagedorn said.

Those critical infrastructure components include housing facilities, which Hagedorn described as metal boxes, an airstrip to transfer workers and supplies, a pier to receive supplies via barge, six feet worth of gravel to prevent facilities from melting the tundra, as well as thousands of 13,000-pound sandbags to surround the facilities to prevent erosion.

Beyond the construction of the superficial elements at the site, the project has met one major milestone in working toward a unified pipeline.

“One of the biggest things we’ve accomplished in the last two years is the export pipeline,” Hagedorn said. “The 22-mile export pipeline has a 70,000-barrel-a-day capacity pipeline, (which is) 12 inches in diameter that connects into the Badami pipeline ... about 22 miles away. ... That connects into the Endicott pipeline, which connects into the pump station (connecting it to) the TransAlaska Pipeline.”

Meaning, there are about five different pipeline owners along the route who will benefit from the completion of Point Thomson. As far from the west side of the National Trillium Reserve to the outskirts of the Arctic National Wildlife Refuge will be connected through pipelines into the TransAlaska Pipeline System for the first time.

“That’s really what’s so important about the infrastructure that we’re putting in here, ... it’s a common carrier pipeline so anyone else can use it,” Hagedorn said. “... As long as the industry is healthy and the investment climate is healthy on the North Slope, the next project will bring on the next project, which will bring on the next project. And that’s kind of what we’re seeing.”

Point Thomson is unique for another reason as well — it’s also a natural gas field. Even though is it not yet legal to transfer unliquified natural gas, engineers have found a way to turn the gas found in these fields into a liquid.

“It’s a liquid development but it really is the foundation for future gas commercialization because we’re putting in the critical infrastructure for one of the critical gas fields on the North Slope along with Prudhoe Bay,” Hagedorn said.

In addition to the future of gas, Point Thomson is also offering additional employment for Alaskans. Of the 92 companies that contracted with this project, 80 percent of them are Alaskan. This past winter, more than 730 people were employed on site and the number is expected to increase next summer to 800 workers.

“We have learned a great deal from them and have benefitted tremendously from being able to hire Alaskans who know how to work in Alaska,” Hagedorn said. “This has been a big part of our success so far in maintaining our schedule and starting up in 2016. So, this is a really important factor for Alaska. ... It’s $4 billion and it’s a lot of jobs.” In the long-run, Point Thomson and those 800 jobs are just the foundation for the Alaska LNG Project, a world-scale project estimated to provide 10,000 to 15,000 long-term jobs while also providing gas to Alaskans, Hagedorn said.

In respect to oil taxes and Ballot Measure 1, to be voted on Aug. 19 and which could repeal the More Alaska Production Act and revert Alaska back to the previous tax structure known as ACES, Hagedorn closed the presentation with three things for voters to keep in mind: competitive, predictable and durable.

“Those are the keys to making sure you have a healthy system that will attract healthy investment,” Hagedorn said. “From our perspective, ACES was not competitive, particularly at high prices. It needs to be predictable to have investment and it has to be durable. To be durable, it has to be robust and it has to work for everyone.”

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