Alaska plans temporary restart of oil pipeline

ANCHORAGE, Alaska (Reuters) - Operators sought on Tuesday to temporarily restart Alaska’s main oil pipeline to prevent it from freezing and aim to resume normal flows later this week with a bypass of a leak that forced the shutdown of 12 percent of U.S. crude output.

A mooring station for oil tankers can be seen at the Trans-Alaska Pipeline Marine Terminal in Valdez, Alaska on August 8, 2008. REUTERS/Lucas Jackson

The Trans Alaska Pipeline System, the 800-mile (1,280 kilometer) pipe that usually carries 630,000 barrels of oil per day has been closed since Saturday following a small leak at an oil pumping station.

Pipeline operator Alyeska was seeking regulatory approval to temporarily restart it and prevent oil in the pipeline from freezing, which would make a resumption of flows more difficult. The bypass is expected to be completed this week, though there was no exact timetable.

“This temporary startup would be a prudent and necessary measure to manage the potential risks associated with an extended cold-weather shutdown,” according to a statement from Alyeska and other responders.

Officials dealing with the incident said if wax or ice buildup leads to damages to the pipeline system, it could shut down the pipeline for a more extended period of time and affect other North Slope facilities.

“This would be an interim startup only. The line would shut down again while the bypass piping is installed at Pump Station 1,” officials said.

Companies have been drawing down inventories at the Valdez export terminal, which was holding about 2.38 million barrels of oil as of Monday, to keep shipments going to refiners.

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Alyeska will await approval from the U.S. Department of Transportation (DOT) before any resumption of operations, a source familiar with operations said on Tuesday. Regulatory approval sometimes delays pipeline restarts.

The estimated volume of oil leaked was 29 barrels (1,200 gallons) as of Tuesday morning, according to the statement, and crews are installing an 800-gallon containment vault for oil recovery from the leak site in the booster pump basement.

The shutdown continued to help drive up oil prices, which rose 2 percent to top $91 a barrel on Tuesday.

Alaska is continuing to ship normal volumes of crude and the Valdez terminal has seen stocks fall by 7 percent since Sunday, when its tanks held 2.57 million barrels.

The pipeline is usually able to restart quickly, even after a spill. Last May, when several thousand barrels of oil spilled into a pump station, the line was shut down for less than four days.

Crews were working to drain a leaky discharge pipe, seal it off and install a 157-foot bypass line, the DEC said. Alyeska has chartered aircraft to deliver needed parts and equipment to the North Slope.

Alyeska is owned by the companies that operate on Alaska’s North Slope -- BP owns about 47 percent of the venture, while ConocoPhillips and Exxon Mobil hold 28 percent and 20 percent respectively.

The shutdown of Alaska’s main oil pipeline poses only a minor threat to U.S. crude supplies, but any snag delaying its restart could send West Coast refiners scrambling for substitute crude and drive up prices.

Reporting by Janet McGurty; Writing by Joshua Schneyer; Editing by Marguerita Choy