Conditional Badami pipeline transfer OK’d

The Regulatory Commission of Alaska has approved a transfer of interest in the Nutaaq Pipeline - running from Badami to Endicott - subject to a number of conditions.

In an Oct. 22 ruling RCA said the approval is subject to receipt of a corporate guaranty of Miller Energy Resources, closing of the transaction between Miller and Savant Alaska and approval of transfer of right-of-way leases by the Alaska Department of Natural Resources.

Savant and Miller applied to RCA in June to transfer Savant’s 67.5 percent interest in Nutaaq Pipeline to Miller, which is in the process of acquiring Savant. The remaining 32.5 percent interest in Nutaaq is held by ASRC Exploration subsidiary Badami Pipeline Holding Co.

Nutaaq holds two RCA certificates: one for the crude oil line which carries Badami oil to Endicott; the other for the line which carries natural gas to Badami.

The RCA said in its ruling that Miller is “financially fit” to own, operate and maintain a 67.5 percent indirect controlling interest in Nutaaq, and through Nutaaq the Badami Pipeline System, on the condition that the applicants file a corporate guaranty. That guaranty is required by Nov. 21, the commission said.

The finding of financial fitness is also based on retention of 100 percent of the existing DR&R obligation (the requirement to dismantle, remove and restore at the end of pipeline life) by BP Transportation Alaska, the company which developed Badami and built the field’s facilities, including the pipelines.

Miller and Savant had also requested expedited consideration - which the commission granted - to facilitate year-end closing under their agreement, and told RCA that the longer lead time required for working on the North Slope meant a commission decision on or before Oct. 24 “will enable Miller to commence strategic drilling programs in the new year to help ensure continued operation of Nutaaq Pipeline in a reliable and efficient manner.”

- Kristen Nelson