Trans-Alaska Pipeline to shut down again, oil prices jump

By Phaedra Friend Troy

Crude oil prices jumped on the anticipated news that the Trans-Alaska Pipeline System (TAPS) will be shut down again in preparation for the installation of the pipeline bypass.

Following an oil leak that was discovered at Pump Station 1 in Prudhoe Bay Saturday, January 8, the Trans-Alaska Pipeline System was restarted the evening of Tuesday, January 11, with limited flow to prepare the pipeline for harsh winter weather.

At noon on Wednesday, January 12, the oil flow through the TAPS line was 400,000 barrels per day. Producers were supplying anywhere from 330,000 to 350,000 barrels a day (roughly half the typical flow from North Slope production), and the remaining flow was coming from Pump Station 1 storage tanks.

With the resumption of oil flow, oil began seeping again into the booster pump building basement, but the leaking oil was captured in the containment tank and recovered by vacuum trucks. Personnel were able to keep the overflow to just an inch deep in the 5-foot tank.

Winter Weather Poses Threat

Crews are performing various tasks to mitigate risks associated with having the pipeline shut during the cold Alaskan winter.

Two pipeline cleaning pigs, likely to have posed a problem had they been left in the cold line, have been located within the system, and are expected to be extracted mid-day Thursday, January 13.

Additionally, personnel are equipping the line to prevent the formation of wax or ice in the pipeline without the presence of oil flow.

Another Shut Down

Crews continue to fabricate a bypass pipe system to circumvent the damaged section.

The pipeline will again be shut down to prepare for the installation of the pipeline bypass on Friday, January 14. It is unclear whether the pipeline will be shut after the cleaning pig has been captured or once the bypass is ready to install at Pump Station 1.

The pipeline bypass installation is expected to take 36 hours; and should everything run smoothly, the Trans-Alaska Pipeline System will be back up and running on Sunday, January 16.

Crews are performing various tasks for a cold restart, should it be necessary.

Markets React

The price of oil in London and New York has rallied due to the supply constraint of closing the 800-mile-long Alaskan pipeline.

Brent crude in London made a run for $100 a barrel, reaching nearly $99 a barrel in trading Wednesday; and on the NYMEX, the price of crude oil jumped to nearly $92 a barrel.

Prices steadied Thursday morning, losing some gains. Nonetheless, the current path for oil trading seems set on the $100 mark.

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