The Trans Alaska Pipeline shut down on Saturday after a leak was discovered at the intake pump station at Prudhoe Bay, constricting supply in one of the United States' key oil arteries.


Alyeska Pipeline Service Co., the operator of the 800-mile (1,280 kilometre) line which runs from the Prudhoe Bay oilfield to the tanker port of Valdez, said the leak was discovered Saturday morning. Oil producers are in the process of cutting output to 5 percent of the normal rate of around 630,000 barrels per day.

There is no estimate yet of how long the pipeline -- which carries about 12 percent of U.S. oil production -- will be shut down or when normal production can resume, said Alyeska spokeswoman Michelle Egan.

So far, shipments from the port of Valdez, the terminus of the pipeline, are unaffected and tankers are being loaded on schedule. Oil produced during the shutdown will be stored at Prudhoe Bay until the pipeline reopens.

There is no estimate of how much oil leaked, but Alyeska said no oil has been found to have escaped beyond concrete encasing the pipeline.

"The concrete encasement is why we don't believe there's any environmental impact," said Egan. "Until we can excavate, we won't be able to say that definitely."

Alyeska is owned by oil companies with interests on Alaska's North Slope, the third-largest U.S. oil producing region after the Gulf of Mexico and Texas. Major owners in the region are BP, ConocoPhillips and Exxon Mobil Corp.

BP, which operates the Prudhoe Bay field, has started the process of reducing production, said company spokesman Steve Rinehart.

"I can't give you an estimate of how long it will take to get down to 5 percent, but we are working quickly and safely to do that," he said. Tasks include freeze-protecting lines and facilities, he said.

The leak was discovered in the basement of a building that holds booster pumps for Pump Station 1, the intake station for the oil artery, Egan said. The booster pumps are housed in a building separate from the main pump building, and the leak appears to be in a concrete-encased pipeline on the exterior, she said.

The last time the pipeline was shut down unexpectedly was in May, when a power outage at a pump station triggered a series of events that caused an estimated 210,000 gallons (5,000 barrels) of crude oil to spill out of the storage tank at Pump Station 9, located about 105 miles south of Fairbanks.

The spill, which shut the pipeline for 79 hours, was the biggest in Alaska since the 212,252-gallon spill in 2006 from a corroded transit pipeline at the Prudhoe Bay field.

Alyeska has been automating and centralizing operations, part of its plan for coping with reduced throughput and dramatically increased cost per barrel shipped. Oil flow through the line peaked in 1988 at over 2 million barrels a day, but output from Prudhoe Bay and other maturing North Slope fields has dwindled significantly since then.

Critics argue that Alyeska's operational changes pose safety risks, and they directed much of their ire at former Alyeska President Kevin Hostler, who retired in September.

To replace Hostler, Alyeska's owners hired retired U.S. Coast Guard Vice Admiral Thomas Barrett, the former head of the Department of Transportation's Pipeline and Hazardous Materials Administration. Barrett officially started at Alyeska on Jan 1.

(Writing by Mary Milliken and Bill Rigby, editing by Philip Barbara)

Source: Reuters US Online Report Domestic News

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