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Nanushuk faces the Army

March 28, 2016

The U.S. Army Corps of Engineers will prepare an environmental-impact statement for Repsol’s Nanushuk project near the village of Nuiqsut.

The $5 billion Nanushuk prospect is an important and positive development for Alaska and could be one of the most significant discoveries on the North Slope since the discovery of the Alpine oil field. Spanish giant Repsol is the proponent in the project, but has taken on partners to reduce its equity to below half for the project.

Repsol is proposing development of hydrocarbon deposits from its oil and gas leasehold on the North Slope of Alaska. The proposed Nanushuk Project will target oil deposits in the Alpine C and Nanushuk reservoirs. Repsol proposes the placement of 3,226,102 cubic yards of clean fill material into 288.0 acres of waters of the United States, including wetlands to construct the Nanushuk Project. The project is on Repsol-operated oil and gas leases southeast of the East Channel of the Colville River. This area is located approximately 52 miles west of Deadhorse and about 7.5 miles northeast of Nuiqsut.

The project will include construction of the Nanushuk Pad comprised of Drill Site 1 and a Central Processing Facility, Drill Site 2, Drill Site 3, an operations center pad, infield pipelines, the export/import Nanushuk Pipeline, infield roads, an access road, a tie-in pad, and a potable water system. The project also includes temporary discharges to 5.8 acres of jurisdictional waters of the U.S. for screening activities at the existing Oliktok Dock.

Alaska’s economic lifeline, the Trans-Alaska Pipeline System (TAPS), is now running at three-quarters empty. The Nanushuk project has the potential to produce up to 120,000 barrels of oil per day, significantly increasing TAPS throughput and revenues to the State of Alaska. State and local spending of taxes and royalties paid by the oil and gas industry directly creates jobs in the public sector and indirectly creates jobs throughout the private sector. The project would generate significant long-term business and economic activity and up to 600 North Slope construction jobs for Alaskans. In addition, 60 direct jobs would be created in Anchorage and two rigs supporting development for five years each would generate 120 to 150 jobs per rig, and more through fabrication, logistics, and indirect jobs. For each direct oil industry job, 20 additional jobs are generated in the Alaska economy.

The Nanushuk project is located near existing industry infrastructure, minimizing potential environmental impact.Thanks to continuing improvements in technology, practices, and oversight, the oil industry has demonstrated that North Slope energy development and environmental stewardship can and do coexist.

Commentary

This would be a great project for Alaska, particularly with TAPS running only 1/4 full and the State facing huge budget pressures. The environmental review process will likely take several years.

Sources

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Source: US Army Corps of Engineers.