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Quality bank implemented for S Miluveach
Kristen Nelson Petroleum News
Sometime next year the Alpine Transportation Co. will begin carrying oil from the Southern Miluveach unit in the Alpine Pipeline, which has carried only a single stream of oil - that from the Colville River unit.
In a Dec. 18 filing with the Regulatory Commission of Alaska ATC requested approval of revisions to its tariff to add a reference to its new Federal Energy Regulatory Commission local pipeline tariff which contains the Alpine quality bank methodology. The company has requested an effective date of Feb. 1 to coincide with proposed effective date of changes to its FERC quality bank methodology tariff.
The pipeline does not receive any revenue from the quality bank, it told the RCA. The quality bank makes monthly adjustments among shippers for quality differentials of the oil going into the Alpine Pipeline.
Implemented in 1984 ATC noted that FERC approved use of a quality bank for the trans-Alaska oil pipeline in 1984, allowing for monetary adjustments between companies using “TAPS to transport oil in a commingled stream,” reflecting different qualities of oil going into the line.
“The TAPS’ quality bank ‘charges shippers of relatively low-quality petroleum who benefit from commingling and distributes the proceeds to shippers of higher quality petroleum whose product is degraded by commingling,’” ATC said. “The quality bank’s goal is to place each company in the same economic position it would enjoy if it received the same petroleum that it delivered to the pipeline on the North Slope.”
The Alpine Pipeline ATC said a quality bank is needed because it will begin transporting “crude petroleum of different characteristics from the crude it has historically transported.” The ATC quality bank will calculate the value for the Colville River unit stream, the Southern Miluveach unit stream and any new streams introduced into the line in the future.
The Alpine Pipeline is a 14-inch diameter line which has historically transported crude from the Colville River unit some 34 miles to an interconnection with the Kuparuk Transportation Co. system, which then moves the crude to the inlet of the trans-Alaska oil pipeline at Prudhoe Bay.
A 6-inch diameter line, some 0.2 miles long, would connect from the Mustang pad processing facility at the Southern Miluveach unit to a tie-in to the Alpine Pipeline near Kuparuk River unit Drill Site 2S, ATC told RCA earlier in December in an application for approval of the connection.
The ATC quality bank mimics the TAPS’ quality bank, the company said, and will use a distillation-based methodology consistent with TAPS PUMP Station No. 1 methodology.
The Alpine quality bank will use the same product prices, adjustments and weightings as the TAPS Pump Station No. 1 quality bank, ATC said, and said will be using the same quality bank administrator as used for the TAPS quality bank, so “its shippers can expect consistent results and consistent application of the methodology.”
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