|
Doyon subsidiary to buy into Kuparuk line
North Alaska Pipeline and Kuparuk Pipeline Co. file with RCA to transfer 21.056% of KPC's interest in Kuparuk Transportation Co.
Kristen Nelson Petroleum News
The Regulatory Commission of Alaska said Sept. 19 that Kuparuk Pipeline Co. and North Alaska Pipeline LLC filed a joint application Sept. 17 to transfer 21.056% of KPC's ownership in the Kuparuk Transportation Co. to NAP. KTC holds the certificate of public convenience and necessity for the line which transports crude oil.
(See map in the online issue PDF)
KTC is a general partnership which owns the Kuparuk Pipeline, holding 95% of the KTC partnership while Unocal Pipeline Co. holds 5%. The Unocal ownership is not affected by the application. KPC's parent company is ConocoPhillips. ConocoPhillips Alaska operates the Kuparuk Pipeline under an operating agreement with KTC.
NAP is a subsidiary of Middle Earth Holding, a wholly owned subsidiary of Doyon Oil Field Services, which in turn is owned by Doyon Ltd., an Alaska Native corporation based in Fairbanks with average gross annual revenues of some $307 million over the last 5 years. NAP is an affiliate of Mid-Alaska Pipeline, which owns and operates the pipeline moving oil between the trans-Alaska Oil Pipeline and the Petro Star refinery. NAP would use cash from its parent to pay for its purchase and to fund operations expenses and working capital needs.
The companies said approval of the application would "have no material impact on current management, personnel, equipment, or the daily operation of KTC or the Kuparuk Pipeline."
Willing and able The companies said: "NAP is willing and able to own an interest in KTC," and said the transaction is in the public's best interest.
The application addresses dismantlement, removal and remediation, DR&R.
NAP's acquisition of 20% of KTC will not jeopardize KTC's ability to satisfy DR&R upon retirement of the pipeline, the companies said, as KPC will continue to own a majority of the line and its parent company has supplied the state "with a DR&R performance guarantee that covers all DR&R obligations arising under the Kuparuk Pipeline Rights-of-Way Leases" and under terms of the Federal Energy Regulatory Commission and RCA Kuparuk Pipeline Tariff Settlement Agreement, "funds to complete DR&R have and will continue to be collected from shippers to complete the DR&R obligation."
The companies also said that from the date of the transaction, NAP will assume responsibility and liability associated with its 20% ownership.
Kuparuk Pipeline In its filing with RCA, the companies said the Kuparuk Pipeline has been transporting crude oil since 1981, and currently consists of 28 miles of 24-inch pipeline from Kuparuk Central Processing Facility 1 to Pump Station 1 on the trans-Alaska oil pipeline, plus the 9-mile Kuparuk Pipeline Extension, an 18-inch pipeline between Kuparuk Central Processing Facility 2 and CPF-1. The line transports sales quality oil from Alpine and CPF-2 to CPF-1, where that crude is commingled with CPF-1 crude and transported to Pump Station 1.
The line also provides transportation for oil from Milne Point and Nikaitchuq; Pikka oil will also flow down the line when that unit begins operation.
The companies said recent discoveries near the Colville River and beyond "including developments in the Beartooth Unit, are expected to rely on the Kuparuk Pipeline to transport their future production."
The line has a capacity of some 380,000 barrels. KTC has been certificated to provide service on the line since 1983 and the line is estimated to remain in service through the end of 2034, a period "which could be extended if new or additional oil production is developed in the area that it serves," the companies said.
Comments on the filing are due by 5 p.m., Oct. 10.
| 