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RCA accepts Swanson pipeline transfer, still looking at tariff
In a Nov. 25 order the Regulatory Commission of Alaska accepted an application by Hilcorp Alaska LLC and Swanson River Oil Pipeline LLC to transfer certificate of public convenience and necessity No. 752 from Hilcorp Alaska to Swanson River.
The applicants told RCA that the purpose of the transfer was “to further the process of placing all of the regulated Alaska pipeline and other midstream assets and interests of Hilcorp Alaska within the ownership and control of separate pipeline company affiliates, Harvest Alaska and Swanson River, which have been created solely for that purpose.”
RCA noted that while Swanson River is an affiliate of Hilcorp Alaska, the transfer involves a 100 percent change of ownership.
The commission said that as a new entity, Swanson River will rely on the financial guaranty of Hilcorp Alaska to demonstrate its financial ability to acquire and operate the pipeline.
“Based on our review of Hilcorp Alaska’s audited financial statements, we find that Swanson River, with the support of Hilcorp Alaska, is financially able to own and operate the Pipeline,” RCA said.
The 18.83-mile, 8-inch pipeline provides the only transportation for oil produced from the Swanson River field.
In addition to Swanson River, Hilcorp Alaska owns and operates Cook Inlet Pipe Line Co. on the west side of Cook Inlet. Harvest Alaska owns and operates the Kenai Beluga Pipeline, Northstar Oil Pipeline, Norstar Gas Pipeline and Endicott Oil Pipeline, and operates and owns 50 percent of Milne Point Oil Pipeline and Milne Point Natural Gas Liquids Pipeline.
RCA said its approval was effective the date of closing of the transaction transferring the Swanson River Oil Pipeline from Hilcorp Alaska LLC to Swanson River Oil Pipeline LLC.
Tariff filing In a separate action, Hilcorp Alaska applied to the commission Oct. 1 to designate the Swanson River Oil Pipeline as a pipeline facility eligible to operate under a simplified pipeline tariff, with a proposed tariff rate of 68 cents per barrel from Swanson River field to a tie-in point with Kenai Pipe Line Co. facilities, an increase from the current rate of 8.9 cents per barrel established by the commission’s predecessor in 1992. Hilcorp requested an effective date for the tariff of Jan. 1.
Tesoro Alaska Co. LLC and Kenai Pipe Line Co. protested Nov. 6. Swanson River Oil Pipeline was acquired by Hilcorp from Kenai Pipe Line in 2013. The protest says Tesoro and its affiliates have purchased all production from the Swanson River field for use as feedstock at the Nikiski refinery, Tesoro could become a shipper on the Swanson pipeline in the future and the proposed rate is not just and reasonable.
Hilcorp and Swanson River Oil Pipeline said in a response that the commission should dismiss the protest “summarily” and if it chooses not to do that, it should appoint a settlement judge as required under the commission’s regulations for simplified rate filings. Hilcorp said the simplified rate filings “are intended to be used by small, single owner, single shipper pipelines” like Swanson River, and “are designed to be relatively simple to follow and to be free of the need for the routine, knee-jerk protests that have plagued even the simplest pipeline rate filings for decades.”
- KRISTEN NELSON
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