Prudhoe Bay officially connected to TAPS

It’s official. After 36 years of operation, the Prudhoe Bay oil field on Alaska’s North Slope has been formally connected to the trans-Alaska oil pipeline under the terms of a connection agreement between the field owners and Alyeska Pipeline Service Co., the pipeline operator.

On Oct. 28 the Regulatory Commission of Alaska, or RCA, issued an order approving the connection agreement, following negotiations over a provision in the agreement relating to indemnification for economic losses.

Of course, with the pipeline originally being built for the purpose of exporting oil from the Prudhoe Bay field, the field has in practice been connected to the pipeline ever since North Slope oil production began in 1977. But, unlike with other North Slope fields which subsequently connected to the pipeline, there was never, until now, a formal agreement on the terms and conditions under which Prudhoe Bay oil could be delivered into the line.

No issues until 2010

This agreement-free arrangement continued with apparent equanimity until 2010, when major replacements of transit lines carrying oil to pump station 1 at the northern end of the line caused Alyeska to apply to RCA for a transit-line connection permit and an associated connection agreement. The transit line replacements came as a result of a major oil spill as a consequence of corrosion in the original transit lines.

Contention over the new connection agreement revolved around a clause relating to economic loss indemnification, a clause that apparently is included in some North Slope oil field connection agreements but not in others. Following recommendations from RCA administrative law judge John Wood, that clause has been removed from a final version of the agreement, which RCA has now approved.

—Alan Bailey