Sidebar: Nothing Unusual

Kay Cashman

Petroleum News

The operator of the trans-Alaska pipeline system says its recent 10% slowdown of the oil flowing through the 800-mile line is not unusual, nor is it connected to the drop in oil prices and the coronavirus pandemic.

In an April 24 interview with Michelle Egan, a member of the leadership team and chief communications officer for pipeline operator Alyeska Pipeline Service Co., she told Petroleum News the 50,000 barrel-per-day reduction that began earlier that day is simply part of the day-to-day management of the pipeline.

“We are not a storage facility,” Egan said. “We have a dynamic system. Oil comes in at the North Slope, it flows down the pipeline to Valdez, where it’s loaded onto tankers.”

Alyeska currently has 14 storage tanks in Valdez.

What the company does on a daily basis in any circumstances, not just under the current circumstances, is exchange information on tanker schedules and their capacities, as well as projected crude volumes from the North Slope producers and “we balance the inventory and if we see we are getting high inventory of over 75%, we have two levers we can pull, so to speak,” she said.

The first lever and the most common thing Alyeska does is work with the tankers and their schedules to see if an adjustment can be made with them to pick up more, or less, crude.

For example, “last week we pulled the first lever and worked through some high inventory; this time of year, high inventory is not uncommon” Egan said.

The other lever is to ask the producers to “send us less oil and that’s a proration. We looked at the 28 day and 60 day forecasts and we have some high inventory points in the month of May,” she said.

“The 10% reduction in incoming oil is to manage some of these high inventories points we see that are around until end of May.”

“But things could change,” Egan said.

“There could be a tanker schedule change that would change the proration - say a couple of large tankers coming into Valdez. We look at that every day and make adjustments as we have to,” she said, noting Alyeska strives to have a steady and light proration to minimize impact.

“I’ve been with Alyeska for 11-plus years … larger prorations for a shorter period of time are more common. This one is a little different because it’s for a longer duration (through the end of May) but for a smaller amount (of crude),” Egan said.

“The fact is as we get better and better at managing inventory and doing projections.”

- KAY CASHMAN