President's Message
Kevin Hostler, President and CEO

Progress continues on Strategic Reconfiguration project

Alyeska continues to make major changes to the Trans Alaska Pipeline System’s (TAPS) pump stations through our Strategic Reconfiguration Project, one of the most significant investments since construction of the pipeline. TAPS was originally designed for twice the current throughput and has operated for nearly 30 years using on-site personnel to monitor pipeline operations. Installation of electrically driven pumps at four critical Pump Stations (PS) 1, 3, 4 and 9, along with modern automation and control equipment, will allow the stations to be operated remotely, like pipelines throughout the Lower 48. The design also provides the flexibility to adjust for future increases and decreases in crude oil flow throughputs.

The reconfiguration is expected to lower overall operating costs by approximately 10 percent annually and eliminate maintenance costs for equipment at as many as 75 facilities that will be put in non-operational status. Minimizing the cost of operation extends the economic life of TAPS and North Slope oil fields.

Visits to the field and conversations with the pipeline reconfiguration team led to a decision to alter the reconfiguration implementation plan and focus on the completion of PS 9, then move to PS 3. Once PS 3 and 9 are complete, we will shift resources to PS 1 and 4.

A variety of factors led to this decision, among them were the continued challenges around incomplete or late design engineering, issues with turbine generators, and resource constraints. Late design engineering had a two-fold impact on the project schedule and cost: the incomplete design scope made it difficult to accurately plan field work and complete procurement; and design changes after mobilization of field contractors resulted in increased costs.

Additionally, it became apparent that some of our internal resources were becoming overcommitted. Simplifying our approach by completing two stations at a time corrects this problem. This also resolves bed space issues at all the pump stations.

This strategic and historic investment in the pipeline is an investment in Alaska’s oil industry that will pay dividends for years to come.