RCA considering 2011 shipping rates

Subsidiaries of BP and ConocoPhillips requesting rate increases and decreases on six North Slope transmission lines for 2011

Eric Lidji

For Petroleum News

State regulators are considering rate changes, up and down, on six North Slope pipelines.

BP recently asked the Regulatory Commission of Alaska for permission to change the crude oil shipping rates at five interconnection points on four pipelines owned by its subsidiaries. BP asked for the proposed rates to go into effect at the start of the year.

Under the proposed changes:

• The cost to ship a barrel of oil on the Milne Point Pipeline, from Milne Point processing facilities to the Kuparuk Pipeline, would more than double to 96 cents, up from 44 cents.

• Shipping rates on the Endicott Pipeline would fall some 16 percent. The rate per barrel from the Endicott Island to Pump Station 1 would fall to $2.01, from $2.40, while the rate per barrel from the Badami tie-in to Pump Station 1 would fall to $1.28, from $1.52.

• Shipping rates on the Badami Pipeline, from the Badami processing facilities to the Endicott tie-in, would increase about 7 percent per barrel to $7.78, from $7.26.

• Shipping rates on the Northstar Pipeline would fall to $2.14 per barrel, from $3.54.

The RCA is taking comments on the proposed changes through Dec. 17.

Oliktok, Alpine changes also proposed

ConocoPhillips also recently requested rate changes for two pipelines it operates, and also asked the RCA for the new rates to go into effect at the start of the year.

Under the proposed changes:

• The rate to ship a barrel of natural gas liquids on the Oliktok Pipeline would increase to $1.97, up from $1.31. The company attributed the rate increase to declining throughput, increased operating costs connected with a new pigging program, and other factors.

• The rate to ship a barrel of oil on the Alpine Pipeline would increase to 72 cents, up from 69 cents. ConocoPhillips owns 65 percent of the Alpine Pipeline. Anadarko Petroleum, Arctic Slope Regional Corp. and Kuukpik Corp. own the remaining 35 percent interest.

The RCA is also taking comments on those proposed changes through Dec. 17.

While the companies that own these pipelines are also the main customers, shipping rates play an important role in determining how open the North Slope is as a basin, and how friendly it will be to future third parties looking to rent space on existing infrastructure.