Providing coverage of Alaska and northern Canada's oil and gas industry
July 2018

Vol. 23, No.29 Week of July 22, 2018

BP, Kuparuk Pipeline file for transfer

Kristen Nelson

Petroleum News

The Regulatory Commission of Alaska said July 16 that BP Transportation (Alaska) Inc. and Kuparuk Pipeline Co. have filed for commission approval of a transfer of BTPAs 38 percent partnership interest in Kuparuk Transportation Co. to Kuparuk Pipeline Co.

KTC, a general partnership that owns the Kuparuk Pipeline, holds the certificate of public convenience and necessity for transportation of crude oil on the pipeline.

This is part of the swap, announced July 3, by which ConocoPhillips acquires BPs 39.2 percent interest in the Greater Kuparuk area and BPs 38 percent interest in the Kuparuk Transportation Co. and BP acquires a Conoco subsidiary with a 16.5 percent interest in the Clair field in the United Kingdom.

The companies are asking RCA for summary approval of the transfer.

They told the commission the Kuparuk Pipeline has been transporting crude oil since 1981 and consists of a 28-mile 24-inch pipeline from Kuparuk Central Processing Facility No. 1 to the trans-Alaska oil pipeline at Pump Station 1, plus the Kuparuk Pipeline Extension which runs between Kuparuk Central Processing Facility No. 2 and CPF-1.

The extension transports sales quality crude oil produced at the Alpine field and CPF-2 to CPF-1, where it is commingled with crude from CPF-1 and transported to Pump Station No. 1. The Kuparuk Pipeline has a capacity of some 350,000 barrels per day.

ConocoPhillips Alaska operates the Kuparuk Pipeline through an operating agreement with Kuparuk Transportation Co.

Ownership of the KTC is 57 percent, Kuparuk Pipeline Co., 38 percent, BPTA and 5 percent Unocal Pipeline Co. (Unocal also holds a 5 percent interest in the Kuparuk River unit).

No substantial change in ownership

The companies said the transfer of BPs interest in KPC does not involved a substantial change in ownership. KPC will remain managing partner of KTC following the transfer and there will be no impact on current management, personnel, equipment, or the daily operation of KTC or the Kuparuk Pipeline, the companies told the commission.

Management power remains with the management committee, which has representatives of each of the partners who vote based on percentage of ownership. Actions of the Management Committee require the affirmative vote of at least two partners holding at least 75% of the partnership interests in KTC, the companies said.

Following approval of the transfer, the companies said, KPC and Unocal Pipeline Co. will both be required to approve management decisions for KTC.

The companies said there will be no expected change in day-to-day operations of the pipeline following transfer of BPs interest.

KTC, through an operating agreement with CPAI, operates the Kuparuk Pipeline and does not intend to change how it does so upon approval of this Application, the companies told RCA.

Dismantlement, removal and remediation responsibilities will not be jeopardized, the companies said, as KPCs parent company has supplied the Alaska Department of Natural Resources with a DR&R performance guarantee covering all DR&R obligations under the Kuparuk Pipeline right-of-way leases, and under terms of the Federal Energy Regulatory Commission and RCA approved Kuparuk Pipeline Tariff Settlement Agreement, funds to complete DR&R have and will be collected from shippers to complete the DR&R obligation.

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