Providing coverage of Alaska and northern Canada's oil and gas industry
May 2020

Vol. 25, No.19 Week of May 17, 2020

TAPS runs smoothly under prorations

Pipeline oil volume cut increased from 10% to 15%; prorations likely to continue into June based on volumes, tanker schedules

Steve Sutherlin

Petroleum News

Despite flow reductions from prorations, the trans-Alaska pipeline system is working fine, Betsy Haines, senior vice president of operations and maintenance, Alyeska Pipeline Service Co., told the Alaska House Resources Committee at a meeting in Anchorage May 8.

“We have continued to move oil without disruption,” Haines said.

Alyeska has ratcheted the oil flow in the pipeline down another 5% since implementing a 10% reduction on April 24 - standing at 85% proration as of the date of the presentation, she said.

“Prorations are something we work hard to avoid,” Haines said, adding that Alyeska monitors oil coming into the system, along with tanker schedules and capacity to make sure that any oil arriving in the Valdez terminal is loaded on a tanker in a reasonable time after arrival.

“Looking at our 28-day and 60-day outlook, we’ve identified some inventory challenges in the month of May,” she said. “TAPS was not designed to be an oil storage facility.”

At Valdez the oil is routed to a tank farm and balanced across the tanks, she said. With 14 tanks in service, the terminal has a 6.6 million barrel working inventory capacity.

Haines said it is difficult to predict when the prorations will end; it depends on oil coming into TAPS and the tanker schedule.

“Both of these factors can change,” she said.

Lowering flow rates increases challenges

Peaks in throughput are not uncommon in the spring, but as warmer months come, it’s easier to deal with lower flow volumes, Haines said.

TAPS was designed to move warm crude oil in an arctic environment.

As throughput declines, so does the rate at which oil moves.

“In 1988 one barrel of oil traveled the 800-mile distance in four and one half days; today that same trip takes 18 days,” Haines said. “The slower the flow rate, the colder the oil becomes; that cold can lead to ice formations and wax accumulations.”

Alyeska began studying low flow issues a decade ago, she said.

“Today we have many mitigations in place, along with special pigging routines, wax management strategies and adding heat,” Haines said. “Through the winter we monitor the temperature along TAPS, determining the need for mitigations.”

Crude oil can be recirculated at pump stations 3, 4, 7 and 9 to add frictional heat. Supplemental skid mounted mobile slipstream heaters are available at two locations.

How low can flow go?

The lower limits of volumes at which the pipeline can operate depend on many factors, Haines said, adding, “I can say confidently that in warmer months ahead we can manage considerably lower rates than we see today.”

“Earlier flow assurance research examined TAPS operational issues at flow rates above 300,000 barrels per day,” she said. “Our research continues, and data analysis to date suggests that with additional investment, it may be technically possible to operate down to annualized throughput rates as low as 200,000 barrels per day.”

A dedicated flow assurance team is evaluating new technologies and alternative operating modes to build confidence that TAPS can operate at lower volumes, Haines said, adding that technical capability does not necessarily equate to economic viability; the long-term sustainability of TAPS may ultimately be limited by per barrel transportation costs.

“The best antidote for low flow issues is more oil,” Haines said. “We need a fiscal climate that makes it attractive to produce and deliver oil to TAPS.”

ConocoPhillips COVID-19 cuts not factored into prorations

Haines said that a COVID-19 related 100,000 bpd North Slope production cut announced April 30 by ConocoPhillips was not factored into Alyeska’s proration research in April, which determined an equal cut to all the connectors.

“We’ve used the same basis because this has been a constant proration that is occurring though April now into May, and the information that is coming in from the Kuparuk connections is information that is independent from the prorations,” she said.

Alyeska will look at several factors for analysis - the upstream, the capacity of the terminal and the vessel movements

“Believe it or not, (the factors) do change almost daily.” Haines said. “We will certainly be looking at the information that’s provided to us from all connectors as we go into the month of June.”

ConocoPhillips is scheduled to phase in its announced production cuts in late May.

“The proration is the last tool that we want to use in our toolbox,” Haines said. “Provided we manage the high points that we see coming at the terminal, we would like to turn back the prorations as soon as possible.”

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