Alaska Pipeline Operator Eases Oil Cuts As Demand Picks Up

Alyeska Pipeline, the operator of the Trans-Alaska Pipeline System (TAPS), is allowing increased oil flows through the pipeline system, easing the production curtailments on the North Slope as demand begins to recover.

Brigham A. McCown, president of Alyeska Pipeline, tweeted last week that “With inventory and supply chain distribution improving, Alyeska Pipeline will be removing 2/3rds of previous proration.”

This means that the pipeline system will be able to take up to 95 percent of crude oil shipments from the North Slope, McCown said. 

After the oil price crash in March, the crashing demand in the pandemic, and the soaring inventories, Alyeska Pipeline had imposed a 15-percent cut to the oil flow from the North Slope crude oil production. Last week, the pipeline operator eased that cut to 5 percent, or around 25,000 barrels per day (bpd) across all fields, Alaska Public Media reported.

“It is a big deal to be able to adjust a proration and get back to business, where every barrel that producers intend to move, we can move,” Alyeska spokeswoman Michelle Egan told the outlet, adding that there wasn’t a timeline yet as to when the operator would remove the last 5-percent oil flow reduction.

According to TAPS’ weekly roundup of crude oil throughput via the Trans-Alaska system, throughput increased from 434,859 barrels on May 11 to throughput of 450,299 barrels on May 18.

Production from the North Slope dropped in April to just over 400,000 bpd from more than 500,000 bpd before the price crash. 

Despite the eased restrictions on oil flows on the pipeline system, ConocoPhillips will not be reversing its plan to curtail 100,000 bpd of gross production in Alaska in June. At the end of April, ConocoPhillips said that it would curtail 460,000 bpd in North America in June, including 100,000 bpd in Alaska, due to weak prices. 

“The decision to curtail production by 100,000 barrels a day in June has been made, and that won’t change,” Natalie Lowman, spokeswoman for Conoco Alaska, said in an email to Alaska Public Media.  

By Tsvetana Paraskova for Oilprice.com

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