A West Coast refining pinch is causing a bit of a phenomenon — the occasional hauling of North Slope crude oil back to Alaska.
“It’s an unusual situation,” Steve Rinehart, spokesman for BP Alaska, told Petroleum News today.
“This is basically managing inventory,” he said. “We expect it to be short-term.”
The problem is that BP’s Cherry Point refinery at Ferndale, Wash., remains out of service due to a Feb. 17 fire and spring maintenance. A couple of other West Coast refineries also are undergoing maintenance, Rinehart said.
This has crimped capacity at refineries processing North Slope crude. In managing its oil inventory, BP managers have decided the best and safest option in some cases is to leave some crude aboard tankers bound for Alaska to pick up more oil, Rinehart said.
Alaska Tanker Co. of Beaverton, Ore., carries North Slope oil for BP aboard four double-hull tankers.
Anil Mathur, ATC president, said BP tells his company “what oil they want us to carry where.”
The back-hauling of oil to Alaska “has happened before,” he said, “but it’s not common.”
Although it seems odd, back-hauling actually makes sense under certain circumstances.
“The incremental cost of doing so is not that much,” Mathur said. The tankers are going to return to Alaska regardless of whether they’re empty or carrying some crude, he said, and the oil can act as ballast for the ships.
Once back at the oil terminal at Valdez, the tankers don’t off-load the oil, Mathur said. Rather, they’re topped off with more oil for the voyage back south.
He declined to specify the volumes of oil returning to the state.
The Prince William Sound Regional Citizens’ Advisory Council, however, has been tracking the back-haul phenomenon. The organization, which keeps watch over the oil terminal and tanker traffic, has noted five ATC tankers arriving at the terminal since late February laden with between 81,000 barrels and 300,000 barrels of oil. Three of these arrivals occurred during April.
The ATC tankers have a capacity of 1.3 million barrels.
In-bound ships with oil aboard receive the same tug escort as fully loaded ships sailing out of Port Valdez into Prince William Sound, Rinehart and Mathur said.
See story in May 6 issue, available online at 11 a.m., Friday, May 4 at www.PetroleumNews.com