Project Finance Related News Article
PIGS TEACH BP A LESSON ON OIL PIPE CORROSION IN PRUDHOE BAY
Washington - Oil giant BP is learning some lessons from pigs in its Alaska pipeline.
Pigs are in-the-pipe testing tools that might have spotted the corrosion that prompted last weekend's partial shutdown of BP's Prudhoe Bay oilfield, but BP has not used them there for 14 years.
When BP finally pigged its pipes, under government orders after a massive March oil spill, the results were shocking.
"When we conducted an intelligent pigging, which gives you a lot of data, we were shocked and disappointed in what it found," said BP spokesperson Neil Chapman. It questioned "the effectiveness of our [corrosion] programme; we had a gap in the programme and we're going to fix it".
BP said last weekend that it was closing operations at its Prudhoe Bay oilfield on Alaska's North Slope, the largest in the US, after an inspection with a smart pig showed extensive corrosion and holes in its 26km pipeline.
Pigs, in this context, are bullet-shaped devices pushed through pipelines by the force of the oil behind them. One type of pig, the scraper or cleaner, scours sediment and other deposits from the pipe's inner walls as it goes. After that, a more sophisticated smart pig can move through with sensors that gauge corrosion and wear.
An early version of the scraper, made of a wooden keg wrapped in burlap and barbed wire, emitted a pig-like squeal as it moved, giving the gadget its colourful name.
BP had not sent in the pigs at its Alaska line since 1992, relying instead on ultrasound and other external techniques to inspect its lines, Chapman said. The company employed pigs every five years in its North Sea pipelines, a company spokesperson said.
The 1 287km Trans Alaska Pipeline, which receives oil drilled by BP and other North Slope producers, sent a scraper through its lines every week and ran a smart pig every year, said Dan Lawn, a retired regulator at Alaska's department of environment conservation.
"To know where the pipe's thin, they have to run pigs," Lawn said. "If you just measure it with an ultrasonic device from the outside, it will not give you verifiable data."
The government ordered BP to smart-pig its pipeline after a March spill of 757 000 litres of crude onto the Artic tundra. Back then, the line was so clogged they had to send numerous scrapers through before a smart pig would fit, said Damon Hill of the US transportation department, which regulates oil pipelines.
A smart pig run on July 22 [2006] showed that pipe walls were 80 percent corroded in spots, with two places where there was 0.2cm of steel.
Chapman said this had surprised BP officials, who did not expect such corrosion from the type of crude being carried, a processed oil with water, sediments and gas removed. The pig found sludge in the pipe and microbiological activity despite anticorrosion chemicals.
Lawn, who is the president of the Alaska Forum for Environmental Responsibility, said BP had been warned repeatedly by workers and inspectors about possible corrosion. Chapman said any concerns were investigated, adding that "the key is having details where you can investigate so that you know what action is to be taken".
Asked whether BP intended to make pigging part of its routine at the Alaska operation, Chapman replied: "What we've got to do is improve the programme using new techniques, new technology and we've obviously got to work with the regulator to establish a programme we're going to undertake."
BP said last week it would keep pumping crude from the western half of the Prudhoe Bay field, while it replaced corroded pipe on the eastern half.
The world's third-biggest oil company by market value would produce 200 000 barrels a day, about half the field's usual output, said spokesperson Tom Mueller.
Last Monday BP said that Prudhoe Bay would be shut because of corrosion in the pipes that fed the oil to the Trans Alaska Pipeline, and as crude prices jumped 3 percent.
On Thursday federal pipeline regulators said that the western part could be operated and outlined requirements for stepped-up monitoring.
"With greatly enhanced surveillance and response capability, I am confident we can continue to safely operate the line," said BP America president Robert Malone. Investigations of the pipes in the western section "increased our confidence in the operational integrity of this pipeline".
The company's plan to restore half the field's capacity exceeds the best-case scenario of UBS analyst Jon Rigby, who estimated that BP would be unable to exceed 180 000 barrels a day from Prudhoe Bay for the rest of the year.
The eastern side of the field, where 81 percent of the wall of steel pipe was eaten away in some places, has been entirely shut. Malone said it would be off for between one and five months.
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