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Unocal still working to unload TAPS share
Unocal Pipeline Co. has again applied to the Regulatory Commission of Alaska for an extension of the transfer of its operating authority in the Trans Alaska Pipeline System.
Unocal has been trying to get out of its 1.35 percent ownership interest in TAPS since 2012, when it notified the other TAPS owners that it would not continue its TAPS operations after July 31, 2012.
The original TAPS System Agreement was for a 30-year term from the date of pipeline commissioning, with an option to renew the agreement for successive five-year terms, “provided at least two owners agreed to continue operations.”
The pipeline was commissioned on July 31, 1977, so the initial agreement expired July 31, 2007, at which time the owners elected to renew the agreement for an additional five-year term, expiring July 31, 2012.
Unocal notified the other owners that it did not intend to continue operations and applied to the commission to temporarily suspend its service on TAPS starting July 31, 2012, pending the sale or transfer of its ownership interest, and has applied for numerous extensions since then.
In its June 28, 2012, application to the commission for temporary suspension of service Unocal said that an owner who elects not to continue with TAPS must sell its interest to a third-party or another TAPS owner, subject to the remaining TAPS owners’ right of first refusal, and said it was “actively engaged in negotiations” with the other TAPS owners on the transfer of its ownership interest.
“Unocal has decided not to continue TAPS operations for an additional renewal term because its interest in TAPS no longer meets the company’s core strategic needs,” it told the commission in its 2012 application.
Disputes in arbitration, litigation In its latest application for extension Unocal told the commission: “Unocal and the other TAPS Carriers have a dispute over several transfer-related matters.” Koch Alaska Pipeline Co., previously an owner, transferred its ownership share to the other owners in 2012. The remaining owners, in addition to Unocal, are BP Pipelines (Alaska) Inc., ConocoPhillips Transportation Alaska Inc. and Exxon Mobil Pipeline Co.
Unocal said the dispute is in arbitration, with some portions in litigation.
“The litigation has been time-consuming and is likely to continue for a significant period of time. Unocal is evaluating all its options regarding how best to proceed with these matters,” the company told the commission.
- KRISTEN NELSON
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