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Alyeska looks to future
Barrett on continuing upgrades, upcoming reorganization, preparing for future
Alan Bailey Petroleum News
In a talk to the Alaska Support Industry Alliance on Sept. 13, Tom Barrett, president of Alyeska Pipeline Service Co., commented on the steps that his company is taking to ensure that the trans-Alaska pipeline can continue to ship oil efficiently in the coming years. The pipeline forms the conduit for exporting oil from North Slope oil fields. Alyeska operates the line on behalf of the pipeline owners.
Alyeska’s goal is to maintain the technical and economic viability of the pipeline system, which is essential for any kind of oil movement off the North Slope, Barrett said.
A busy year “We’ve had a very busy year, a very positive one for us,” he said, reflecting on the amount of maintenance work that his company has carried out over the course of the past 12 months, and on a move of the communications center in the Valdez Marine Terminal. The challenge is to conduct all of this work while also keeping the oil moving through the line, he said.
Currently the company is running an inspection pig, an instrument-equipped, torpedo-shaped device that runs down the inside of the line, all the way from pump station 1 on the North Slope to Valdez, Barrett said.
He commented that that a massive project to move from the old communications building in Valdez took two years to complete and involved multiple contractors, including telecoms and construction contractors, as well as technicians from contractors and from Alyeska itself. The project came in on budget and ahead of schedule, Barrett said.
“Multiple contractors worked on that project, to take what was basically a failing building, full of critical communications links for our control systems, and put them in a new setup, new buildings, but also transfer those systems without causing any interruptions to the service,” Barrett said.
Company reorganization Barrett also commented on Alyeska’s upcoming company reorganization. As previously reported in Petroleum News, the company is restructuring in line with its business focus on the efficient maintenance of the pipeline system.
“We’re looking to be a better operating company, and also a more efficient one,” Barrett said. “We’ve been pretty good at capping costs, incrementally driving them down, but looking forward we need a little more fundamental change.”
But improved efficiency will result in some job losses, both for Alyeska and for its contractors.
“We’re going to downsize by about 10 percent,” Barrett said. About 130 job positions will be lost, he said.
Focus on maintenance needed Although Alyeska was originally structured as a construction company, nowadays 65 percent of the company’s spending relates to maintenance work, Barrett said. But the company is still organized around that construction model. As examples of some of the efficiency issues that have arisen, Barrett commented that different pump stations and the Valdez Marine Terminal have different procedures for conducting the same type of maintenance, rather than having standardized procedures across the company.
“We’re not organized to do maintenance efficiently and with the confidence we want,” Barrett said.
The concept is to move towards the use of best maintenance practices, with a more functional organization. The company anticipates a more condition-based approach to maintenance, using sensors and data, rather than an approach focused on equipment reliability, Barrett said.
“We’re able to tag maintenance a lot better to specific pieces of equipment, specific operational parameters, and we’re going to organize around that. We’re going to change our processes,” he said.
However, it will be necessary to be careful in how this is done, to ensure that oil continues to move safely through the pipeline, he commented.
And the changes will be hard, given the way that they will impact people - it will be difficult and challenging for some, while creating new opportunities for others. Some jobs will be new and some jobs will be different. Different skills will be required. However, Alyeska does plan to be pretty aggressive in moving people into new positions, Barrett said.
Planning for the future Some have questioned why Alyeska is making these changes at a time when the outlook for future North Slope oil production seems particularly promising, with, for example, the Arctic National Wildlife Refuge being opened up, Barrett said. Alyeska is insulating itself from future uncertainty, given that there are no guarantees for the future, and with the possibility that the oil price could drop again, he said.
“You hope for the best, but my job’s to plan for the worst,” Barrett said.
The company continues to address issues such as how to deal with water and wax in the line. And the company has been spending a lot of money on implementing a strategy for maintaining heat in the oil, as oil throughput declines. Moreover, with the pipeline system now being 40 years old, the owner oil companies will need to invest in further upgrades to the facilities.
“We’re going to continue to modernize,” Barrett said.
Ultimately the efficiency of the system is critically important. The cost per barrel of moving oil through the pipeline system impacts everybody on the North Slope and everybody in Alaska. The more money that is spent on moving oil across the state, the less money goes into the state Permanent Fund, Barrett commented. Heightened efficiency also makes Alaska oil more competitive, he said.
Ballot measure criticism During his talk Barrett also slammed the proposed new anadromous fish habitat protection law that is in a ballot measure in the upcoming election. This measure, if passed, would have a major detrimental impact on the operation of TAPS, given the potential for lengthy delays in renewing the many permits that Alyeska has for operating the pipeline system, he said.
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