Providing coverage of Alaska and northern Canada's oil and gas industry
December 2017

Vol. 22, No. 52 Week of December 24, 2017

New Slope pipeline tariffs mainly down

Operators of lines feeding trans-Alaska oil pipeline cite higher volumes, lower costs, for reductions; methodology for increases

Kristen Nelson

Petroleum News

Of North Slope pipeline tariff revisions filed for 2018, more show a decrease from 2017, or are the same, than show an increase. Increased volumes, followed by reduced costs, are the most frequently cited reasons for lower rates. For two pipelines with higher rates, no generalized reasons were provided; those tariff filings referred to methodologies in settlement agreements reached with the state in the past.

These are tariffs for pipelines feeding crude oil from major North Slope fields into the trans-Alaska oil pipeline. Notices of pipeline carrier tariff filings by the Regulatory Commission of Alaska include lines moving crude oil from Alpine on the western side of the Slope to Badami on the eastern side.

The line from Point Thomson to Badami, the most recent to be constructed, is not included in this group of tariff filings because that tariff does not currently require a year-end filing. The owners of the Point Thomson line, ExxonMobil Pipeline Co. and BP Transportation (Alaska) Inc., reached a settlement with the state in 2016 providing for an initial rate of $17.56 per barrel through March 31, 2017, and a rate of $12.09 per barrel from April 1, 2017, with a new rate to come into effect no later than July 1, 2019.

Alpine rate down

Alpine Transportation Co., which operates the pipeline which moves oil from the Alpine unit to an interconnection in the Kuparuk River unit, proposes to reduce its annual per-barrel tariff from 72 cents to 67 cents. In its filing with RCA the company said the reduction was “due primarily to projected throughput for 2018 being higher than 2017 projected throughput.” Alpine field operator ConocoPhillips Alaska has added production from the new CD5 pad, which came online in October 2015, to existing production.

Major ownership in the Alpine line is held by ConocoPhillips and Anadarko Petroleum; ASRC Pipeline Co. has a 15 percent interest and Kuukpik Corp. has a 1.67 percent interest.

In its fall Revenue Sources Book the Alaska Department of Revenue said fiscal year 2017 crude production (July 2016-June 2017) for Alpine averaged 58,900 barrels per day, with FY 2018 (July 2017-June 2018) projected to average 63,100 bpd.

As with other lines, the proposed annual tariff revision is based on a settlement agreement with the state. Alpine Transportation requested that the new rate be effective Jan. 1 and noted it had also submitted a filing with the Federal Energy Regulatory Commission. RCA regulates intrastate rates; FERC regulates rates for interstate volumes.


Nutaaq Pipeline, which provides service from Badami to a tie-in point with the Endicott Pipeline, told RCA that it does not seek a revision of its current rate of $1.10 per barrel. The Nutaaq operator is Glacier Oil and Gas, which operates the Badami field through its subsidiary Savant Alaska.

In its filing with RCA Glacier said the continuation of its current tariff is based on updated 2018 expenses, “including $646,379 less in maintenance projects planned for 2018” and “updated throughput anticipated in 2018 based on production estimates from Point Thomson.”

In the fall forecast Revenue said Point Thomson volumes averaged 3,100 bpd for FY 2017 and were projected to average the same for FY 2018, increasing to 5,300 bpd in FY 2019 (beginning July 2018).


Endicott, operated by Hilcorp subsidiary Harvest Alaska, filed two 2018 tariffs, one for the line from the Endicott main production island to Pump Station 1 and one for the line from the Badami connection to Pump Station 1.

Both rates decreased from 2017, with the Endicott to Pump 1 rate dropping from $2.19 per barrel to $1.97 per barrel, and the Badami connection to Pump Station 1 rate dropping from $1.39 per barrel to $1.25 per barrel. Those 2017 rates reflect a mid-year reduction: In December 2016 Endicott filed for rates of $3.27 (up from $2.22) for the main line and $2.08 per barrel (up from $1.41) for the Badami connection line.

In August the company filed for a mid-year rate decrease, telling RCA that the revision was voluntary based on increased throughput from Point Thomson. The midyear reduction was from $3.27 to $2.19 per barrel for the main line and from $2.08 per barrel to $1.39 for the Badami connection line.


The Kuparuk Transportation Co. filed two tariffs: One from the Kuparuk River unit origin and one from the Milne Point connection (there is a separate tariff from the Milne Point central facilities to Kuparuk, see below).

Both rates represent a decrease: the rate for Kuparuk-origin crude for 2018 will be 20 cents per barrel, down from 22.8 cents per barrel; the 2018 rate for Milne-origin crude will be 15.2 cents per barrel, down from 17.4 cents in 2017.

In its filing with RCA the company said: “The decrease is due primarily to 2018 projected operating expense being lower than 2017 projected operating expense.”

The company said that as required it notified the non-Kuparuk parties (the state and Anadarko Petroleum) in advance of the filing and neither has advised it of any dispute on the rate calculation under the Kuparuk settlement agreement. Anadarko oil comes through the Kuparuk system because that company is an owner in the Alpine field and that oil moves through the Kuparuk pipeline on its way to Pump Station 1.

Milne Point, Northstar

The Milne Point and Northstar pipelines were the only North Slope pipelines to file for year-over-year increases. Both filings were submitted by Harvest Alaska, which operates those lines.

The rate from Milne to its connection with Kuparuk will increase from 63 cents per barrel to $1.20 in 2018. In its filing the pipeline said the increase was in accordance with the Milne Point settlement methodology in the Milne Point settlement agreement approved by RCA in 1996.

The Northstar Pipeline Co. filed for an increase from $1.14 per barrel to $2.48 per barrel, citing a 2009 settlement agreement between the state and BP Transportation (Alaska).

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