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Vol. 25, No.20 Week of May 24, 2020
Providing coverage of Alaska and northern Canada's oil and gas industry

Alyeska oil prorations now at 95% inventory; supply chain clearing

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Steve Sutherlin

Petroleum News

Alyeska Pipeline Service Co. has adjusted oil flow prorations on the trans-Alaska pipeline system to a 95% proration as of May 15, up from an 85% proration in place earlier in May.

“At TAPS, we’re confident the supply chain has stabilized,” We’re ramping back up and as of last Friday are back to safely transporting 95% of our seasonal norm,” Brigham A. McCown, Alyeska president, said in a May 18 Twitter post.

“This is good news for Alaska, the North Slope and downstream stakeholders who rely on TAPS to move every available barrel of oil,” Michelle Egan, Alyeska chief communications officer told Petroleum News May 20. “We should soon be positioned to move 100% of the oil our connectors plan to deliver.”

Alyeska instituted the prorations April 24 because of inventory concerns - to avoid overloading the 800-mile pipeline and its 6.6 million barrel tank farm at the Valdez marine terminal.

As supply and demand for oil delivered on the West Coast begins to balance, tankers are expected to be able adjust sailing schedules to clear the extra flow from the Valdez facility more efficiently.

Inventory, and supply chain distribution is improving, McCown said.

“U.S. petroleum demand was 16.8 (million barrels per day), an increase of 1.5 mb/d for the week & 3.0 mb/d over the past month,” he said. “By product for the week, motor gasoline demand rose by 0.7 mb/d, jet fuel fell by 0.2 mb/d, diesel rose by 0.7 mb/d, and residual fuel oil rose by 0.2 mb/d.”

“We will continue to monitor projections and inventory and make any necessary adjustments,” Egan said.

A dynamic situation

Alyeska routinely monitors the inventory levels in TAPS to avoid an overload, Egan told Petroleum News early in May.

She said the company exchanges information on tanker schedules and capacities, as well as projected crude volumes from North Slope producers and “we balance the inventory and if we see we are getting high inventory of over 75%, we have two levers we can pull, so to speak,” she said.

The first lever and the most common thing Alyeska does is work with the tankers and their schedules to see if an adjustment can be made with them to pick up more, or less, crude.

The other lever is to ask the producers to “send us less oil and that’s a proration,” she said.

Occasional prorations are routine.

A COVID-19 related 100,000 barrel per day North Slope production cut announced April 30 by ConocoPhillips was not factored into Alyeska’s proration research in April. That cut will be phased in in late May or early June.

- STEVE SUTHERLIN



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