French Pipeline Kept Hold of Crude Oil for Months after Clients went to a Rival
Oil majors including ExxonMobil and Rosneft are set by mid-2013, after almost a year of effort, to recover $250 million of oil retained by a French pipeline company that they stopped using in favour of cheaper routes.
Companies including Exxon, Rosneft, Royal Dutch/Shell and Phillips 66 have around 300,000 tonnes of oil remaining in the French SPSE pipeline, which runs from the Mediterranean port of Lavera to their German plants, the head of SPSE told Reuters.
The companies, which co-own SPSE, decided earlier this year to stop using it and to start supplying their refineries via an alternative pipeline, TAL, which runs from Italy to the same refineries but charges 30-35 percent less in shipping fees.
After months of negotiation, Olivier de Tinguy, head of the SPSE, told Reuters SPSE's management had decided to remove the oil but stressed the process would take a further half year as draining the pipeline is difficult and costly.
Explaining why the decision had taken months, he said that before delivering all the outstanding oil to the owners, SPSE had first to be sure the clients would not decide to resume use of the pipeline.
It is an interesting point that I have never really thought about. Companies that want to change pipelines must find it very difficult to retrieve their oil that is stuck in the pipe. But the oil is by rights the property of the oil company, so the pipeline company had no right to keep it.
How can the oil be recovered from the pipe? I assume some liquid must be pumped along the pipe to drive it out. Is something as simple as water used?
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