Alyeska says $30 million needed to clean tank sludge

Pressurized jets to be installed to stir sludge so it can be piped into tankers as part of crude mix

by The Associated Press

The president of Alyeska Pipeline Service Co. said the company’s oil-storage tanks in Valdez contain more sludge than expected.

Bob Malone said in Washington, D.C., that it will cost about $30 million to clean out the waxy byproduct of crude oil.

Ten of the 18 storage tanks have been inspected, and an average of four feet of sludge was found at the bottom of each one, Malone said. The tanks can each hold more than 16 million gallons of North Slope crude awaiting transport to West Coast refineries.

Company engineers have not determined what is causing the buildup, but Malone said it seems that paraffins are settling out of the crude as it cools.

Malone said the company will install pressurized jets to stir the sludge so that it can be piped onto tankers as part of the crude mix. Then the company will drain and scrub the tanks.

Alyeska critics have said the sludge jeopardizes Alyeska’s ability to fight fires in the tanks.

Renewed criticism of the pipeline company has intensified regulatory scrutiny, and Malone said he is worried about the company’s eroding relations with the Joint Pipeline Office, the consortium of state and federal regulators monitoring the pipeline and Alyeska.

Malone said the company has been irritated by JPO regulators slapping the pipeline company with orders requiring prompt action on fixes that Alyeska announced it was undertaking.

Jerry Brossia, a top JPO official, said March 3 that Alyeska has had difficulty completing repairs and addressing problems as promised, so his office has found it necessary to issue formal orders.

Malone was in Washington to meet with federal regulators and congressional committees that oversee the 800-mile Alaska pipeline. The pipeline and tanker port are owned by six oil companies — mainly BP, ARCO and Exxon — and they formed Alyeska to run the facilities.