BP seeks workers to replace transit lines

By: MARY PEMBERTON - Associated Press | Tuesday, August 8, 2006 8:12 PM PDT ∞

ANCHORAGE, Alaska ---- Oil giant BP searched for skilled workers and steel pipe Tuesday to replace badly corroded transit lines that this week forced the shutdown of operations at the largest oil field in the U.S.

The world's second-largest oil company announced Sunday that it was shutting down the Prudhoe Bay oil field after a small leak was found in one of its three transit lines, which bring oil to the 800-mile trans-Alaska pipeline. BP has 22 miles of transit lines and will be replacing two of the lines, or 16 miles of pipe.

"We have taken all nonessential persons off the slope," Steve Marshall, president of BP Alaska Exploration Inc., told analysts Tuesday. More than 100 workers would be going up in the next few days to remove insulation and get a better look at the corroded pipes, he said.

The company also said that it would recruit workers from across North America to complete the inspections and do other work required, including replacing the corroded transit pipes.

"We need to touch more of the pipe to see where these things are," said Bill Hedges, BP's corrosion expert. "We clearly know we weren't finding the worst spots."

The Prudhoe Bay field produces about 400,000 barrels a day ---- about half of all North Slope production ---- with production divided equally between the eastern and western sides.

The phased shutdown began Sunday on the east side, where the leak was discovered. It will likely move to the west side, where in March corrosion in another transit line caused a spill of up to 270,000 gallons ---- the biggest spill in the history of the North Slope or portion of Alaska north of the Brooks Range mountains.

Bob Malone, chairman of BP North America who took over July 1, defended the company Tuesday.

"I'm not able to see a systemic issue," Malone told analysts. "These are very, very unfortunate incidents. I can say with comfort I'm seeing a high level of focus on safety and operation integrity."

Thomas J. Barrett, administrator of the Department of Transportation's Pipeline and Hazardous Materials Safety Administration, said his office has issued BP several compliance orders since the March 2 spill and will issue several more when the current on-site investigations are complete.

The low-pressure lines were unregulated before the March spill, but Barrett said that the agency was accelerating rule-making to bring them under more scrutiny.

As of Tuesday morning, just 25,000 barrels a day were flowing from the east side of Prudhoe Bay. Oil continued to flow from the west side of the field, and company officials said they hope to avoid a complete shutdown there if additional tests prove it can be done safely, company officials said.

"In general terms, there is still about 200,000 barrels of oil being produced," BP spokesman Daren Beaudo said.

Some analysts estimate that it will take up to three months to complete the repairs. Even if that can be achieved, analyst Bruce Lanni wonders about long-term fallout.

"If I have any concerns, it will be, if they do complete the shut down of the field, with the age and the complexity of the reservoir, how well will it respond once it gets back on-line?" Lanni said.

Marshall said production rates should come back fairly strongly with no deterioration in performance.

BP officials have said that in the worst case scenario, a shutdown could last weeks or months.

Dave Pursell, analyst with Pickering Energy, said it's difficult to calculate a schedule because there are so many variables: securing enough pipe; getting the skilled labor; favorable weather.

"They are going from standing still to a full sprint, and that is pretty difficult," Pursell said. "Patching a hole in a pipeline is easily achieved; replacing miles of existing pipeline is a different calculus."

BP said Tuesday that it already has ordered pipe from U.S. Steel Corp. and Nippon Steel Corp., but those orders could take months to fill, so it was looking to its global supply chain for existing pipe.

Marshall said a vacuum had been placed on the line that leaked Sunday. The line spilled a little more than 200 gallons for about 15 minutes before it was discovered by workers, and a test of the pipe showed numerous areas where the pipe wall was thin. There are 42 gallons in a barrel.

"That line is out of service, and likely will remain out of service for some time," Marshall said.

The replacement pipe will be smaller in diameter to speed up the flow of oil in the transit lines. That should also prevent solids from settling in the bottom of the pipe and giving bacteria a place to grow, Hedges said.

He described the corrosion that occurred in the pipe that leaked Sunday as "individual discreet pits" at the bottom of the pipe, indicating microbiological corrosion that had been missed by external tests on the pipe using an ultrasound device.

The bacteria grew under the solids, Hedges said.

"Microbes and bacteria occur in all oil field systems. The important thing is not to allow them to grow," he said.

Elsewhere in the oil field, where lines were cleaned and scraped to remove buildup, the problem has not occurred, Hedges said. BP now will make sure that the transit lines receive routine maintenance to remove debris, he said.

"This problem should go away, and it has gone away in all the other pipelines around the field," he said.

If a complete shutdown of Prudhoe Bay is necessary, it will affect more than 1,000 wells in the 213,543-acre field owned by BP, ConocoPhillips and ExxonMobil. The first oil flowed at Prudhoe Bay on June 20, 1977, the same year the two troublesome transit lines were built.

BP will be working with state and federal agencies in determining whether a complete shutdown can be avoided, Malone said. In the meantime, the plan is to shut down the entire field.

"Plans are in place to bring down the west side of the field this weekend," Malone said.

-- Associated Press writers Steve Quinn and Dan Caterinicchia contributed to this report.

On the Net:

www.bp.com

http://alaska.bp.com

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