NEWS BULLETIN

August 07, 2006 --- Vol. 12, No. 44August 2006

BP shuts down Prudhoe Bay, will replace main transit lines

After announcing Sunday, Aug. 6, that it was shutting down the Prudhoe Bay oil field following discovery of unexpectedly severe corrosion in and a small spill from a Prudhoe Bay transit line, BP said today that it will replace the main transit lines at Prudhoe Bay.

The shutdown affects an estimated 400,000 barrels per day; 17,000 bpd from Lisburne will remain in production. The Lisburne transit line, BP Exploration (Alaska) President Steve Marshall said Aug. 6, has been cleaned, scraped and smart pigged and confirmed to be in good shape.

The Aug. 6 shutdown of other Prudhoe transit lines was triggered by results of a smart pig run in an oil transit line on the eastern side of the field which revealed 16 anomalies in 12 locations.

Marshall said those results were received late in the week and were being followed up by inspection and ultrasonic testing over the weekend. Early Sunday morning, Aug. 6, around 6 a.m. when insulation was pulled back an oil stain was found. Flow Station 2 was shut down as a result, about 6:30 a.m., cutting off some 33,000 bpd of production. As the investigation continued, a leak to the tundra was found at another point, with some four to five barrels of oil on the tundra and a leak rate of about six gallons per minute. At that rate he said, the leak had been going on for about 15 minutes.

Nearby containment was put in place.

It was after this that BP made the decision to shut down the Prudhoe Bay field, Marshall said. Eastern operating area shutdown was taking place first, to be followed by shutdown of the western operating area.

Bob Malone, chairman and president of BP America Inc., said in a statement issued today that BP has decided to replace the main oil transit lines at Prudhoe Bay “as part of our overall plan for ensuring the integrity of the field.”

Alyeska Pipeline Service Co. spokesman Mike Heatwole told Petroleum News this afternoon that Alyeska staff have been looking at plans the company has developed for handling throughput at various levels.

For the short-term, he said, Alyeska is working toward a plan which would allow continuous operations down to 400,000 bpd. Long-term, he said, there is a question about the impact of lower throughput going into winter.

NOTE: See story in Aug. 13 issue of Petroleum News.


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