BP begins east-west crude pipeline shipments across Panama

BP Products North America Inc. has started shipping crude oil to the US West Coast through Petroterminal de Panama (PTP)’s 600,000 b/d trans-Panama pipeline. Under the terms of a 7-year agreement, BP has leased a total of 5.4 million bbl of PTP’s storage on the Caribbean and Pacific coasts of Panama and committed to east-to-west crude oil shipments averaging 100,000 b/d through the pipeline.

BP-chartered very large crude carriers will offload crude at the Caribbean port of Chiriqui Grande where the oil will be stored and piped to the Pacific Coast port of Charco Azul before being loaded onto tankers bound for the West Coast. BP emphasized that the storage would help reduce demurrage costs by ensuring crude would always be available for pick-up.

The 81-mile Trans-Panama Pipeline opened in 1982 to transport oil from Alaska’s North Slope to Caribbean and US Gulf Coast refineries. The pipeline shut down in 1996 as Alaskan crude shipments declined and reopened in 2003 to transport Ecuadorian crude to the Gulf Coast.

BP and PTP entered into an agreement in May 2008 by which PTP committed to reverse the pipeline and BP committed to lease storage and ship crude oil from the Atlantic Basin along the pipeline. PTP completed pipeline reversal in August 2009, with CB&I building the storage tanks (OGJ Online, Oct. 15, 2009).

Contact Christopher E. Smith at chriss@ogjonline.com.

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