BP fixes ESPO crude for USWC on Alaska snag: sources

By Joshua Schneyer

NEW YORK (BestGrowthStock) – BP Plc (BP.L: ) fixed a tanker cargo of Russia’s ESPO crude for shipment to the U.S. West Coast after a shutdown of Alaska’s main oil pipeline prompted some oil companies to look at foreign crude substitutes, two shipping sources told Reuters on Friday.

BP was said to fix the 115,000 deadweight ton Helga Spirit tanker to load Eastern Siberian pipeline crude on January 20, two shipping sources said. The fixture was done Thursday, one of the sources said.

The tanker would hold around 850,000 barrels of ESPO, a crude trader said. Helga Spirit was last seen moored in southern Japan on Friday, according to AISLive ship tracker on Reuters. ESPO loads at Kozmino Port, near Vladivostok in Russia’s Far East.

BP did not return calls for comment.

The Trans Alaska Pipeline System (TAPS), which normally ships around 640,000 barrels per day — or 12 percent of U.S. oil output — was closed for 84 hours this week, temporarily shutting in most of Alaska’s oil production. The closure followed a small leak discovered on January 8.

Concerns about potential supply shortfalls from Alaska had U.S. West Coast refiners on their feet this week, looking at cargoes that could substitute Alaska North Slope crude if the pipeline problems persisted.

BP, which is also the top producer in Alaska and the top stakeholder in TAPS, has about 500,000 barrels a day of refining capacity on the U.S. West Coast, including in Washington and California.

Several Aframax cargoes of ESPO have been sent to the U.S. West Coast (USWC) before. BP is not known to charter regular shipments to the region, the shipping sources said, but has typically fixed ESPO cargoes for delivery to Japan or Korea.

BP may have bought ESPO crude for running in U.S. refineries from other parties in the past, one crude trader said.

TAPS resumed shipments on an emergency basis on Tuesday, but is expected to shut down again over the weekend as operator Alyeska installs a bypass pipe around the leak. That process could take a few days, Alyeska said, after which TAPS is expected to resume normal shipments.

Meanwhile, crude in storage in Alaska’s Valdez terminal had dwindled to below 20 percent of tank capacity as of early Friday, an oil industry source in Alaska estimated.

It takes around 15 days to ship crude between Kozmino and Los Angeles, a shipping source said.

(Additional reporting by Edward McAllister and Janet McGurty; editing by Jim Marshall)