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Unocal’s pending TAPS sale hits snag Company says dispute with other owners in trans-Alaska oil pipeline system has gone to arbitration; Unocal is smallest stakeholder Wesley Loy For Petroleum News
Unocal Pipeline Co. continues to work toward the sale of its small ownership stake in TAPS, the trans-Alaska pipeline system.
Unocal is part of Chevron Corp.
In June 2012, Unocal made a filing with the Regulatory Commission of Alaska saying it intended to sell its interest in TAPS.
The company has been working since then to finalize the deal. It’s not clear who will end up with Unocal’s share, but the company has signaled it could be one or more of the other TAPS owners.
Unocal holds by far the smallest stake among the four current owners at about 1.36 percent.
The other owners are BP, ConocoPhillips and ExxonMobil.
In December 2012, the regulatory commission approved the transfer of another minority owner’s stake in TAPS. Koch Alaska Pipeline Co. LLC dealt its interest to BP, ConocoPhillips and ExxonMobil.
Koch Alaska is a unit of privately held Koch Industries Inc. of Wichita, Kan. Another Koch subsidiary, Flint Hills Resources, operates a refinery at North Pole, along the pipeline route.
Dispute arises The trans-Alaska pipeline carries Alaska North Slope crude oil 800 miles to a terminal at Valdez, where the oil is loaded aboard tankers for delivery to West Coast refineries. TAPS has been in operation since 1977.
Current daily throughput is under 600,000 barrels per day.
With Koch’s exit, the ownership breakdown in TAPS pipeline assets now looks like this: BP, 48.44 percent; ConocoPhillips, 29.21 percent; ExxonMobil, 20.99 percent; and Unocal, 1.36 percent.
The regulatory commission in July 2012 gave Unocal permission to temporarily suspend service on its share of capacity on the pipeline, pending a sale of its ownership interest.
In seeking that suspension, Unocal told the commission it was bowing out of the pipeline ownership group because its interest in TAPS “no longer meets the company’s core strategic needs.”
Recently, on April 25, Unocal filed an update with the regulatory commission on where the pending sale stands.
“Unocal is not in a position to file an application to transfer its operating authority at this time,” the update said.
The filing said Unocal and the other TAPS owners “have a dispute over several transfer-related matters,” the filing said.
“Unocal and the other TAPS Carriers are arbitrating their dispute, and are also litigating portions of the dispute so that the transfer process can move forward,” the filing said.
Unocal told the commission that by July 25, it would file either an application to transfer its interest or an explanation for any further delay.
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