Two pipeline companies have changed their proposals covering transportation of increasing California Outer Continental Shelf crude oil production to market.
The changes affect the competition to transport Santa Barbara Channel crude to Los Angeles area refineries beginning in 1996.
The competition heated earlier this year after Chevron Corp. and partners won a permit for interim tankering of crude from Point Arguello field (OGJ, Feb. 15, p. 40). The Chevron group won the permit on condition it halt tankering and begin transporting via onshore pipeline by 1996.
Exxon Corp. later withdrew its application to tanker increased output from its Santa Ynez Unit after committing to move its crude via the All-American Pipeline (AAPL) from Santa Barbara to McCamey, Tex. (OGJ, Oct. 25, Newsletter). Each project is expected to produce 85,000-90,000 b/d at peak. Point Arguello is near that level now, and Exxon's project is due to start up in mid-December.
The Chevron group must sign a throughput agreement with a pipeline by Feb. 1, 1994, or the interim tanker permit aborts.
Each of the remaining competing pipeline proposals would seek to transport the incremental volumes of offshore crude plus production from the San Joaquin Valley and use connections to AAPL.
PROJECT CHANGES
Four Corners Pipeline Co. abandoned plans to reverse its Line 90, which carries Alaskan North Slope crude from Los Angeles to AAPL at Cadiz, Calif.
Four Corners now wants to increase capacity of Line 63, which connects with AAPL at Pentland, Calif., to 110,000 b/d from its current 75,000 b/d at a cost of about $10 million. That assumes blending the lower gravity offshore crude with lighter San Joaquin crude.
Four Corners cited a new long term contract with ANS producers that tempers expectations of a sharp decline in ANS supplies. That would then prolong Line 90's current service. Four Corners Vice. Pres. Dan Reyneveld said his company concluded that the volumes of OCS production "just weren't there" to justify reversal.
Pacific Pipeline is staying in the race by offering a new 120 mile, 130,000 b/d connection to AAPL to Bakersfield at a cost of $134 million.
Pacific Pipeline had support from Chevron and Exxon for a new coastal pipeline from Santa Barbara to Los Angeles, but that route is on hold because AAPL won rate agreements with the two companies (OGJ, Oct. 25, Newsletter). That project may be revived if Mobil Corp. wins permits to expand production from state waters with its proposed Clearview project (OGJ, July 5, p. 20).
Cajon Pipeline is sticking with what Pres. Ron Hinn calls "a plain vanilla pipeline" connecting with AAPL near Barstow, Calif., and extending 142 miles to Los Angeles with a capacity of 180,000 b/d at an estimated cost of $108 million.
The Cajon proposal began with no industry support but is the only project that currently has financial backing from an OCS producer-Chevron. Although Exxon previously backed Four Corners' reversal of Line 90, officials would say only that the company continues to evaluate the three options.
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