Contract let for Panamanian terminal expansion

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Oct. 15 -- Petroterminal de Panama SA (PTP) has let CB&I a contract valued at more than $100 million to engineer, procure, and construct the second-phase expansion of Trans-Panama Pipeline terminal facilities.

The work includes the design and construction of 5.4 million bbl of crude oil storage along with associated civil, mechanical, and electrical work at PTP's terminal facilities in Chiriqui Grande on Panama's Atlantic coast, and Puerto Armuelles on the Pacific coast.

CB&I built the original PTP storage tanks in the late 1970s and holds the engineering, procurement, and construction for the first phase of expansion.

The 130-km, 860,000-b/d Trans-Panama pipeline was originally built to carry oil eastward from the port of Charco Azul on Panama’s Pacific coast to Chiriqui Grande on its Atlantic coast.

Completed in 1982 for the transport of Alaskan crude to eastern markets, the Trans-Panama line carried more than 2.7 billion bbl of crude at peak rates of 800,000 b/d until 1996, when it was shut due to the decline of production in Alaska.

"Severe declines in the production of Alaskan North Slope, Californian, and Mexican crude oils and significant increases in production in West Africa, South America ,and the Commonwealth of Independent States have given rise to a new shift in the flow of crude oil," said PTP Chief Executive Officer Jay Bernstein.

BP Products North America signed an agreement with PTP to ship oil to its US West Coast refineries through the reversed Trans-Panama Pipeline in May 2008 (OGJ Online, May 28, 2008).

Tesoro Corp. signed a similar agreement, saying it would use the line to for crude produced in Africa, the Atlantic region of South America, and the North Sea to its five Pacific Rim refineries.

According to Bernstein, reversal of the line “establishes a new conduit for the flow of crude oil from the Atlantic basin to the Pacific and will enable Tesoro to source a broader range of crude oils to supply its Pacific Rim refining system.”

In August, Tesoro transported the first oil in reverse through the pipeline, a Castilla Blend crude from Colombia, which the refiner planned to process in California.

Contact Eric Watkins at hippalus@yahoo.com.

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