Unocal says TAPS sale issues settled

Kristen Nelson

Petroleum News

Unocal Pipeline Co. told the Regulatory Commission of Alaska Sept. 3 that issues around sale of its share in the Trans Alaska Pipeline System “have been resolved” and said it is working with other entities on a joint application to the commission on the transfer of its TAPS shares.

Unocal Pipeline requested commission authorization to temporarily suspend service on its share of pipeline capacity in June 2012, “pending the finalization of the sale of its ownership interest.” Unocal had the smallest interest of any of the owners, just 1.36%, the company told RCA, and said its share could be sold or transferred to “a third party, another TAPS Owner, or all of the remaining TAPS owners.”

Since then, Unocal has told the commission in periodic filings, it and the other carriers (BP Pipelines (Alaska) Inc., Exxon Mobil Pipeline Co. and ConocoPhillips Transportation Alaska Inc.) have been “arbitrating their dispute, as well as litigating portions of the dispute so that the transfer process can move forward.”

The TAPS operating agreement was up for a five-year renewal in 2020. “Unocal has decided not to continue TAPS operations for an additional renewal term because its interest in TAPS no longer meets the company’s core strategic needs,” the company told RCA in 2012.

As recently as September 2018, the company told RCA: “The litigation has been time-consuming and is likely to continue for a significant period of time.”

In its Sept. 3 filing with the commission, Unocal asked for an extension through March 1, but said it “expects to submit the joint transfer application soon and well in advance of that date.”

Unocal was purchased by Chevron in 2005. Chevron holds a 4.95% working owner position in the Kuparuk River unit, 1.16% in the Prudhoe Bay unit and 11.11% in the Duck Island unit.

In a Sept. 19 ruling the commission provided an extension through March 1.

- KRISTEN NELSON