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Hilcorp Planning Island in Beaufort to Develop Offshore Alaska Targets

A subsidiary of Hilcorp Energy Co. has filed plans with the Interior Department for its proposal to build a manmade island six miles offshore atop North Slope oil targets in Alaska's Beaufort Sea, and a subsea pipeline connecting the island to the mainland.

Houston-based Hilcorp said Monday its subsidiary, Hilcorp Alaska LLC, filed a development and production plan with the Bureau of Ocean Energy Management (BOEM) for its Liberty Project. The project calls for building a 9.3-acre artificial island, which would be called Liberty Island, about 15 miles east of Prudhoe Bay in Foggy Island Bay. The water depth at the construction site is about 19 feet.

"Filing of the plan is the first of many steps in the permitting process, which entails multiple approvals at the local, state and federal levels and is expected to take more than two years," Hilcorp said. "A final analysis and decision to proceed with the project will be made after all the necessary permits have been issued."

Hilcorp said Liberty Island would be similar to four other artificial islands that have been used in Alaska's offshore for nearly 30 years.

Endicott and Northstar islands were completed by Alaska Interstate Construction LLC in 1987 and 2000, respectively, and were subsequently used by units of BP plc and Hilcorp to produce North Slope oil, targeting the Endicott and Northstar oilfields. Hilcorp purchased all of BP's interests in Endicott and Northstar in 2014 (see Daily GPIApril 23, 2014).

Meanwhile, Pioneer Natural Resources Co. completed an offshore island in the Oooguruk oilfield in 2008, which was sold to Caelus Energy Alaska LLC in 2013 (see Shale DailyOct. 25, 2013). Oil began to flow from Spy Island, an artificial island built atop the Nikaitchuq oilfield and owned and operated by Italy's Eni SpA, in 2011 (see Daily GPINov. 3, 2009).

Hilcorp said Liberty Island would be well protected from polar ice because it is shielded by a belt of offshore barrier islands, and covered by stable "shore-fast" sea ice during the winter season. The company added that unlike Endicott Island, Liberty Island would not be connected to the mainland with a permanent road or causeway; personnel and equipment would be transported by helicopter or boat. A subsea pipeline would be used to transport oil produced from the island.

Hilcorp’s partners in the Liberty Project include BP Exploration (Alaska) Inc. and ASRC Exploration LLC.

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