Volcano-halted Alaska oil production to resume

ANCHORAGE, Alaska, July 13 (Reuters) With Redoubt Volcano quieting down and a series of modifications planned at the oil-loading terminal near its base, suspended oil production in Alaska’s Cook Inlet is likely to resume by mid-August, officials representing the companies that pump and ship the oil said Monday.

Production from the Chevron CVX.N-operated Granite Point and Trading Bay fields is expected to restart, though possibly not at the 7,500-barrel-a-day level that was typical before Redoubt on March 22 began its series of explosive eruptions, officials said.

“Production may be at a reduced rate due to reservoir conditions brought in by the shut-in, and may not reach the levels that were occurring just prior to suspension of production,” said Roxanne Sinz, a Chevron spokeswoman.

To enable resumed production, operators of the Drift River Terminal on the west side of Cook Inlet said they have decided to modify the facility so that oil will be shipped directly from the production platforms through the system’s 42-mile pipeline into waiting tanker vessels, bypassing the terminal’s storage tanks, officials said.

“The bottom line here is the goals are to continue to maintain jobs in the region and to restart production. This meets the goals of a lot of that,” said Casey Sullivan, a spokesman for Cook Inlet Pipe Line Co, the terminal’s operator.

The ultimate fate of the 41-year-old Drift River Terminal remains unclear, Sullivan said. “The facility remains in pretty good shape,” he said. “The concern is the location.”

Cook Inlet Pipe Line is owned by Chevron and Pacific Energy Resources PFE.TO, a partner in the fields that feed the terminal. Exxon Mobil XOM.N also holds a minor share in the affected fields.

Redoubt, a 10,197-foot volcano about 100 miles southwest of Anchorage, continued to emit occasional steam but was much quieter than it has been in past months, according to a status report issued Monday by the Alaska Volcano Observatory.

Conditions at the volcano had calmed enough that the observatory, a joint program operated by state and federal officials to monitor Alaska’s many volcanoes, last week ended its around-the-clock staffing by scientists who had been on duty to watch Redoubt.

Before this year, Redoubt’s last major eruptions occurred during the winter of 1989 and 1990, a five-month period when operations at Drift River were also suspended.

Cook Inlet natural gas production was unaffected by the volcanic eruptions. (Editing by Christian Wiessner)