August 02, 2002 --- Vol. 8, No. 80August 2002

RCA okays Cook Inlet Pipe Line ownership change

The Regulatory Commission of Alaska has approved acquisition by Forest Oil Corp. and Unocal of a 20 percent interest in Cook Inlet Pipe Line Co. formerly owned by Phillips Petroleum Co. Cook Inlet Pipe Line operates a pipeline system on the western side of Cook Inlet.

Forest, Phillips and Unocal collectively filed June 20 for transfer of Phillips' operating authority for a 20 percent interest in the pipeline, jointly owned by four shareholders: Forest and Unocal 30 percent each; Phillips and Mobil Pipe Line Co. 20 percent each.

After the sale, Forest and Unocal would each have 40 percent; Mobil would continue to have 20 percent.

The companies told the RCA that Forest and Unocal exercised their rights of first refusal under the pipeline shareholders' agreement, after an initial offering by Forest.

Phillips does not have oil production in the area served by Cook Inlet Pipe Line, the companies told the commission, "is not exploring for oil there, and has no future plans to do so."

Both Forest and Unocal, however, have recently announced major discoveries in Cook Inlet and have continuing plans for exploring there, the companies said.

RCA said the pipeline's rates are governed by a settlement with the state of Alaska and that rates and the settlement are not affected by changes in ownership of the pipeline's stock. In the 2001 agreement, the commission said, the state and Cook Inlet Pipe Line agreed to past rates and refunds and to a methodology to calculate future rates until the end of the life of the pipeline. The commission accepted the rate base settlement in February.

BP has produced water spill at Lisburne

The Alaska Department of Environmental Conservation reported Aug. 2 that BP Exploration (Alaska) Inc. had a produced water spill estimated at 6,300 gallons at the Lisburne production center Aug. 1 at 4:15 p.m.

The produced water mixture is primarily salt water with 0.1 percent of crude oil.

The Lisburne production center is in the eastern operations area of the BP-operated Prudhoe Bay oil field, near Deadhorse.

DEC said BP reports that a faulty valve on a produced water line was the cause of the release. The company is investigating the cause of the spill.

The produced water release was on a gravel pad and covers an area of approximately 10,000 square feet. DEC said that BP has constructed a containment berm around the affected area.

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