Hilcorp’s CIPL purchase approved by RCA

The Regulatory Commission of Alaska has approved Hilcorp Alaska LLC’s acquisition of the 50 percent of Cook Inlet Pipe Line Co., CIPL, which it doesn’t already own. Hilcorp acquired 50 percent of CIPL as part of its purchase of Union Oil Company of California’s Cook Inlet assets, a sale which closed in January 2012.

Hilcorp Alaska and Pacific Energy Alaska Holdings LLC applied in late November for approval of the transfer of Pacific Energy’s share of CIPL to Hilcorp Alaska and also filed a motion for expedited consideration of the application.

RCA said in a Dec. 31 order that Pacific Energy Alaska Holdings acquired its interest in the pipeline in an on-going bankruptcy proceeding and has not been active in operation of the pipeline. Hilcorp Alaska has operated CIPL since December 2011.

“We find that the transfer of Pacific Energy’s non-working ownership interest in CIPL to Hilcorp Alaska is required by the present and future public convenience and necessity,” the commission said.

The 42-mile CIPL moves oil from the Granite Point, McArthur River, Redoubt Shoal and Trading Bay fields to the Drift River Marine Terminal, which is also owned by CIPL.

RCA said that although throughput has declined in recent years, CIPL continues to move some 7,000 barrels per day of crude oil. And while a 2008 settlement projected the end of life for CIPL would be 2014, RCA said Hilcorp anticipates operating CIPL beyond 2014. RCA said there are discussions under way with the state to extend the life of the line to 2021, with the remaining economic life of the line to be determined by availability of crude oil for transport in economically sufficient quantities.

—KRISTEN NELSON