Alyeska ends its cut to North Slope oil production as demand improves

pipeline
The trans-Alaska pipeline runs alongside the Dalton Highway. (Rashah McChesney/Alaska’s Energy Desk)

The operator of the trans-Alaska pipeline has ended its cut to North Slope oil production as economies open back up and demand for crude starts to improve.

Alyeska Pipeline Service Co. announced it will return to normal operations on Friday. Storage concerns had driven the company to cut the amount of oil flowing down the trans-Alaska pipeline by as much as 15% earlier this month. That’s a reduction of roughly 75,000 barrels of oil a day. Last week, it softened the cut to 5%.

Alyeska said it decided to end the cut this week after reviewing the rates of incoming oil flow and the availability of tankers. Tankers pick up the North Slope crude in Valdez and move it to West Coast refineries.

“Delivering every barrel possible is good news for TAPS, and great news for Alaska, the North Slope and domestic energy supply,” Alyeska President Brigham McCow said in a statement.

But, this doesn’t mean the amount of oil flowing down the pipeline will return to normal for long this month — if at all. ConocoPhillips is chopping its North Slope oil production in half in June, or by about 100,000 barrels per day. The company said it plans to begin ramping down production in late May.

Alyeska operates the pipeline on behalf of its owners: Conoco, BP and ExxonMobil. The value of a barrel of North Slope crawled back to about $30 a barrel this week, after diving below zero in late April.

Reach reporter Tegan Hanlon at thanlon@alaskapublic.org or 907-550-8447.