Providing coverage of Alaska and northern Canada's oil and gas industry
September 2007

Vol. 12, No. 35 Week of September 02, 2007

Alyeska works issues

Strategic reconfiguration project now sequential; part of normal operations

Kristen Nelson

Petroleum News

Strategic reconfiguration, designed to bring the trans-Alaska oil pipeline into the digital age and also in line with current throughput levels of Alaska North Slope crude oil, has itself been reconfigured since the project began in 2003.

Jim Johnson, Alyeska Pipeline Service Co. vice president of pipeline operations, told Petroleum News Aug. 29 that strategic reconfiguration was originally designed to be done with a “project team that came in and did this for Alyeska,” reporting to the president of Alyeska. Strategic reconfiguration “wasn’t being done through the normal Alyeska business processes,” he said. Alyeska operates the trans-Alaska oil pipeline on behalf of the owners.

The other thing that has changed is that work at all four pump stations — 1, 3, 4 and 9 — was planned to be done at the same time.

Both have changed, and the changes are related. Johnson said in December “a decision was made to scale it back and do it on … a series basis: one pump station at a time.”

“In addition we made a decision to … fully integrate the SR construction into normal Alyeska major maintenance and projects,” Johnson said, and the project has now been “fully integrated … into Alyeska’s normal way of doing business.”

Because of the amount of Alyeska involvement needed to run the project on four fronts, working four pump stations at once, the project is now being done in series, with pump station 9 selected for completion first because it uses commercial power, Johnson said, and was the easiest to get going. Lessons learned at pump station 9 will be applied to pump station 3, where work is under way, followed by pump station 4 and then pump station 1.

Doing the project sequentially allows Alyeska “to take the lessons learned from one facility, apply it to the next and get better each time,” Johnson said. The pace of doing the project in a series also puts it at “a pace that Alyeska can better absorb that additional workload.” With some 800 employees, Alyeska is “a relatively small company,” he said. Strategic reconfiguration is a big project for the company to take on — and one that has to be done while Alyeska operates and maintains the existing system.

Largest project on trans-Alaska pipeline since construction

Strategic reconfiguration is the largest project on the trans-Alaska oil pipeline system since original construction, Johnson said.

And it is a “brown-field” project, integrating “new construction with existing operation facilities.” Alyeska is “integrating a whole new control system, mainline pumps, booster pump power and control … while we still have to operate and maintain the legacy facilities.”

Johnson said that at the throughputs Alyeska is seeing today, pump stations 1, 3, 4 and 9 “are the only four pumping stations that we need on the system.”

The project has attracted criticism.

In mid-August Chuck Hamel of Virginia, a frequent critic of Alyeska’s operations, complained to Congress about the project.

Johnson walked through some of the issues Hamel raised with Petroleum News.

Alaska Commissioner of Natural Resources Tom Irwin responded for the State of Alaska in an Aug. 29 letter to Congressmen John Dingell, D-Mich., and Nick Rahall, D-W.Va., chairs respectively of the House Committee on Energy and Commerce and the House Committee on Natural Resources, the recipients of Hamel’s letter.

Irwin told the congressmen that Hamel “appears to have been misinformed” and said Hamel’s portrayal of Alyeska’s strategic reconfiguration project “as being in ‘total disarray and leading to a seeming disaster’ is not accurate.”

Alaska Gov. Sarah Palin, in remarks prepared for the Wall Street Journal in late August, said the State of Alaska takes “these potential problems very seriously.”

“State agencies have been aware of the issues related to the strategic reconfiguration for some time,” the governor said, and the state “will not permit Pump Station 3 equipment to move into operational status until Alyeska has proven the safety and performance of the components.”

Pump station 9 began operating with new electric pumps in February; Alyeska expects pump station 3 to begin moving oil with new pumps around mid-November.

Irwin: there have been problems with strategic reconfiguration

Irwin said the State of Alaska recognizes the trans-Alaska oil pipeline owners have “experienced problems” with the strategic reconfiguration project. Originally, he noted, the plan was aggressive, with a proposed completion date at the end of 2005 and a total cost of $250 million. The project did not meet that goal and the cost soared. Irwin said.

Alyeska had “serious concerns about overworking the construction staff” with concurrent work at pump stations 1, 3, 4 and 9 and reevaluated the project; the company’s operations unit also “took over direct project management. This was a positive action welcomed by state and federal regulators,” Irwin said.

Hamel questioned state oversight of the project and Irwin said the state “fully participates in the Joint Pipeline Office,” the federal-state agency consortium responsible for oversight of both the pipeline and the marine terminal.

Irwin also said many of the issues Hamel raised in his letter “are related to the construction and initial operation” of new strategic reconfiguration equipment. “Difficulties at this stage of the project are not unusual and the JPO is tracking the corrective action process to ensure satisfactory resolution,” Irwin said. “Applicable solutions developed for pump station 9 will be applied to pump station 3 prior to allowing startup of the SR components,” he said.

Pump station 9 issues

Johnson said issues Hamel noted around lightening strikes at pump station 9 have actually been on the Golden Valley Electric Association system — pump station 9 gets its power from Golden Valley. The new mainline pumps are fairly sensitive, he said, and have gone offline after lightning-induced power fluctuations coming from Golden Valley. Alyeska is working with the utility so there will be less impact to their system from strikes and also has changed some software to ensure that if pumps drop offline due to lightning-caused fluctuations in power, there is “an automatic restart two seconds later” to bring the pump back online, he said.

Johnson said between February, when strategic reconfiguration equipment was started at pump station 9, until a planned Aug. 25 maintenance shutdown of the pipeline, reliability was 100 percent on the trans-Alaska oil pipeline: Alyeska was able to ship all the crude it received at pump station 1 on the North Slope. The lightning events have not caused shutdowns, he said, “they’ve been slowdowns.” Pump station 9 might drop offline, Johnson said, “but the northern end — pumps 1, 3 and 4 — can keep pumping because pump 9 comes back online so fast the northern stations don’t even see it.”

Hydraulically induced vibration is being addressed at pump station 9 by an Alyeska equipment specialist working in conjunction with a structural engineer. “I think they’re onsite this week and they’re going to start putting together some plans to provide appropriate stiffening to mitigate the vibration,” he said. Johnson said Alyeska believes “stiffening the support structure for the piping and the module … will attenuate that vibration.”

Hamel was also concerned about tests of backup power at pump station 9, calling them “a total failure.” Johnson and Irwin both said three of four initial tests were successful; Johnson said a fourth test was rerun during the Aug. 25 planned-maintenance shutdown and was successful.

An Alyeska success story

On the issue of welds at pump station 3, Johnson said: “We think that’s actually a good story for us.”

When Alyeska started in back again at pump station 3, we “went through a process to establish where we were in a number of areas,” he said, including a review of all the welding done last year. The contractor was asked to review all the welding and welding records “to be sure that we met our high standards.” What they found were a number of in-process weld records “that looked the same” and started to question them.

Alyeska alerted both JPO and the U.S. Department of Transportation Office of Pipeline Safety. DOT sent some experts up to review the welding records with Alyeska. Johnson said the DOT report isn’t final yet, but according to the agency’s preliminary report Alyeska needs to follow up on some non-integrity-related issues at pump station 9 and at pump station 3, where the new facilities haven’t been pressurized, needs to go back and redo a “very small number” of welds and continue to look for some additional in-process welding records. If those records aren’t found, Johnson said, “we’ll do a re-weld” on those welds where records can’t be found.

“We have a very high standard for welding at Alyeska and these will meet that standard,” he said.

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