Hilcorp given May 1 deadline to repair leaking pipeline

Editor’s note: This story has been changed to correct a typographical error: its statement that the 2014 pipeline leaks were caused by shifting rocks originally and inaccurately read that the leaks were caused by “shifting locks.”

Federal regulators are giving oil company Hilcorp Alaska until May 1 to permanently repair a pipeline leaking approximately 210,000 – 310,000 cubic feet of natural gas per day into Cook Inlet, or else to shut the pipeline off.

The deadline comes from a March 3 letter to Hilcorp Energy Company President Greg Lalicker from Western Region Director Chris Hoidal of the Pipeline and Hazardous Materials Safety Administration (PHMSA), a division of the U.S Department of Transportation with regulatory authority over the safety aspects of the leaking pipeline.

The pipeline leak was discovered by a Hilcorp helicopter on Feb. 7, which spotted the disturbance on the water above. The disturbance was subsequently hidden by surface ice, which also creates safety concerns that have delayed Hilcorp’s plans to send divers to repair the pipe.

“According to Hilcorp, the ice could clear as early as late March or as late as the end of April 2017,” Hoidal wrote, acknowledging Hilcorp’s safety concerns. “The serviceability of the pipeline will remain impaired until at least this time.”

The PHMSA letter also includes PHMSA’s preliminary findings, giving a broader picture of the pipeline’s history and surroundings. The agency allows Hilcorp thirty days to contest the accuracy of these findings.

According to PHMSA, the Hilcorp helicopter that spotted the leak on Feb. 7 had been doing a pipeline survey to investigate an increased flow through the pipeline that Hilcorp first noticed in late January 2017.

“Subsequently, Hilcorp’s flow analysis revealed that the pipeline began leaking in late December 2016,” the letter states.

The leaking portion is part of an approximately 15 mile-long pipeline system that delivers processed natural gas to be used as fuel to four platforms in the Middle Ground Shoal oilfield, about 5 miles from the coast of Nikiski.

The pipeline and the platforms it serves are some of Cook Inlet’s oldest offshore oil infrastructure, built in 1964 by Shell Oil. In 2012 Hilcorp bought two of them — the inactive “Baker” and “Dillon,” platforms — from Chevron Corp. It bought the other two, the active A and B platforms, from XTO Energy in 2015.

Baker and Dillon remain inactive and unmanned, while the A and B platforms are manned and producing oil. The leaking pipeline — 8 inches in diameter and coated with an inch of concrete — carries natural gas, to be burnt as fuel, to the A Platform, from which it is distributed to the others.

PHMSA records two previous leaks in the gas pipeline: in June 2014 and August 2014, when the pipeline was owned by XTO. Both were caused by abrasions from shifting rocks and located about two thirds of a mile from the present leak, and 42 yards apart from one another.

Presently, Hilcorp does annual sonar and echo-sounder inspections of the pipe, which according to the PHMSA letter “do not provide sufficient information to determine whether there are external loads on the pipe, eroded pipe, rock impingements, metal loss, dents, gouges, dielectric coating deterioration, and/or missing l-inch-thick concrete weight coating.”

Within 90 days of the ice thawing and the pipeline becoming accessible to divers, PHMSA will require Hilcorp to use high-resolution sonar to find areas where a gap exists between the pipeline and the Inlet floor for 10 feet or more, and send divers to inspect those areas for missing concrete coating.

While the federal PHMSA has authority over the condition of the pipeline, the methane leaking from it is under the jurisdiction of the Alaska Department of Environmental Conservation, which required Hilcorp to submit an environmental monitoring plan by Wednesday, and a plan for how to shut off the pipe, should it become necessary, by March 13.

Until the pipeline was converted to carry gas in 2005, it carried crude oil produced at the platforms to shore. Hilcorp representatives have said it may still contain residual crude oil which could leak into the water if gas in the pipeline is shut off, allowing it to flood.

A parallel pipeline presently carries oil from the platforms. If the platforms are shut down, Hilcorp has said this pipeline could freeze from the high water content of crude oil, leading to oil spills when it thaws.

PHMSA is also requiring Hilcorp to plan a possible shut-down, including measures to either purge or keep minimum flow through the oil pipeline, and to shut down the gas pipeline while “maintaining pipeline pressure to prevent water intrusion with a product that is non-hazardous to the life, environment, and wildlife.”


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