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Approval to Operate a Central Production Facility
The Oil, Gas, & Minerals Division (OGMD), within the Department of Environment, Great Lakes, and Energy (EGLE), has responsibility for approving requests to operate a central production facility under the authority of Part 615, Supervisor of Wells (formerly PA 61 of 1939, as amended), of the Natural Resources and Environmental Protection Act, 1994 PA 451, as amended (NREPA). The purpose of this approval is to properly account for oil and gas production so that it can be allocated correctly to maintain correlative rights.
A. NAME OF PERMIT OR APPROVAL:
Approval to operate a central production facility
B. STATUTORY AUTHORITY:
Part 615, Supervisor of Wells, Natural Resources and Environmental Protection Act, Public Act 451 of 1994, as amended (MCL 324.61501 - 324.61527)
C. APPLICABLE REGULATION:
Oil and Gas Operations, R 324.510 (Central Production Facility)
D. SUMMARY OF PERMIT/APPROVAL PROCESS:
1. Applicability (activities that require the permit)
A permittee of a well shall not begin the operation of a central production facility without the approval of the Supervisor.
2. Pre-Application Requirements
- Applies to oil and gas production facilities where products of diverse ownership are commingled
- An accurate measurement of oil, gas, and water must be made prior to commingling to assure proper disbursement of proceeds
3. Application Submission Requirements
Detailed plan and description of proposed facility.
The location of the Central Production Facility.
The identification of wells to be connected to the Central Production Facility.
Identification of fluid stream to be commingled.
A schematic of the fluid streams including the location of all of the following
- Individual gas, oil, condensate, and water meters
- Facility and sales gas, oil, condensate, and water meters
- Fuel use and artificial lift meters
- On-site surface equipment
- The method proposed for measurement of allocation of fluid volumes, if individual and facility meters are not used. The method proposed for measurement may include allocation of production to each well using a modal balance scheme
- Identification of the type and model of the gas, oil, condensate, and water meters that are proposed
- Quality assurance procedures, including calibration and proofing, that will be implemented to maintain the accuracy of the meters
- The procedure or method proposed for allocation of each commingled fluid stream
- If production from production units or unitized areas is included in the Central Production Facility, a copy of the pooling or communitization agreement filed pursuant to R 324.303(2) or the unitization agreement developed pursuant to sections 61701 to 61738 of the act (MCL 324.61701 to 324.61738)
4. Procedures and Time-Frame for Obtaining Permit or Approval
- Applicant submits application package to the Petroleum Geology and Production Unit of the OGMD
- The facility location is inspected by area geologist
- Technical review of package is performed to ensure fluids are properly metered and allocated and other requirements are met
5. Operational Requirements
Applicant must comply with all applicable statutes, rules, permit conditions, and stipulations set forth in the approval of the application
7. Appeal Process
- Hearing before Supervisor of Wells
- Appeal to the Circuit Court
8. Public Input Opportunities
Public input opportunity is provided prior to construction of the surface production facility (see Chapter 5.7.2), which is prior to this Central Production facility approval. The decision-maker in this process is the Assistant Supervisor of Wells, which was delegated from the Supervisor of Wells (the Director of EGLE). Complaints or comments regarding the facility are addressed by District Office field staff.
E. ADMINISTERING AGENCY:
EGLE; Oil, Gas, & Minerals Division; Petroleum Geology and Production Unit; P.O. Box 30256, Lansing, Michigan 48909-7756
- Program Phone: 517-241-1544
- Program Webpage: www.michigan.gov/egle/0,4561,7-135-3311_4111_4231-9207--,00.html
- Environmental Assistance Center: 1-800-662-9278, e-mail: EGLE-Assist@Michigan.gov