The 800-mile Trans-Alaska Pipeline System that moves crude was forced to shut down because of a leak and if the problem isn’t fixed, prices may climb said an analyst. Producers such as BP Plc have already suspended most of their local production.
Pump Station 1 leaked and the system had to be closed on Jan. 8, 8:50AM, Alaska time. Operator Alyeska Pipeline Service Co. stated no environmental impacts. No restart time either was reported but help is being given by the Federal and state staff.
After the leak report, BP cut 95% of 410,000 barrels a day crude output on the North Slope said Steve Rinehart, Alyeska spokesman.
The pipeline system shoulders almost 15% of U.S. domestic oil production and the leak pro-rated 5% of normal output to producers said operator, Alyeska, owned by producers that includes BP. Alyeska also stated that crews began to recover oil 7 hours later after the shutdown.
MineLife Pty Ltd founding director Gavin Wendt mentioned that if until tomorrow this is not resolved, prices may reach $90/barrel as the market is susceptible to supply-side problems. Crude oil futures on the New York Mercantile Exchange on Jan.7 closed at $88.03/barrel, its lowest since Dec. 17. In London, BP closed at 492.5p last week. The shares dived 22% after the Macando incident in the Mexican Gulf in April.
In a statement, Alyeska said engineers are already looking at how to safely restart the pipeline. The leak seemed to have come from a piping section next to a booster-pump building encased in concrete Alyesa continued in another statement.
Another North Slope producer, Conoco Phillips’ spokeswoman didn’t not return calls for those who were seeking comment.
Starting in North Slope’s Prudhoe Bay running to Valdez, the pipeline system that began operating in 1977 has shipped over 16 billion barrels of oil and is the northernmost ice-free port in North America said the Alyeska website. Twenty-six percent of Prudhoe Bay is owned by BP as well as adjacent fields with Exxon Mobil Corp., Conoco Phillips and Chevron Corp. America’s largest, Prudhoe Bay field began in 1977 producing nearly 4000,000 barrels daily.
In May, a leak also caused the Alaskan pipeline system to shut down while in March 2006, Trans-Alaskan pipeline corrosion on a pipe wall spilled 6,400 barrels. Rinehart stated that significant reduce in production can come from varied reasons like bad weather and that it’s not uncommon. He added the company can’t tell the duration of the shut down.