Alyeska Pipeline cutting jobs, may close pump stations

PHOTO/Lisa Seifert/For the Journal
Alyeska Pipeline Service Co., operator of the 800-mile trans-Alaska oil pipeline, has embarked on a major restructuring that includes workforce cutbacks and possible dismantling of four of 12 pump stations.

Alyeska aims to cut costs of transporting Alaska North Slope crude oil by 30 to 50 cents a barrel within five years, according to company President David Wight.

Alyeska announced plans April 3 to eliminate 300 positions, cutting its staff by 150, or 15 percent, to about 900 workers this year, and reducing its contractor rolls by 150 workers, or about 10 percent.

The reductions in staff positions will take place at the company’s offices in Anchorage, Fairbanks and Valdez.

The jobs will be eliminated by the end of the year primarily from administrative, management and support positions, company officials said.

Wright said the company wants to eliminate duplication between the three offices and centralize some operations.

Of the 150 positions being eliminated, about 50 are in Valdez, 60 are in Fairbanks and 40 are in Anchorage. Some jobs will be moved from Valdez to Anchorage and Fairbanks, but those numbers won’t be known until staff selection is complete, the company said.

Wight said the changes will not impact the company’s maintenance system for the aging pipeline, which will celebrate its 25th year of operation in June.

Alyeska, which is owned by six oil companies, is currently seeking renewal of its 30-year lease for the pipeline’s right of way from state and federal regulators. Its current lease expires in 2004.

In reorganizing its operations, Alyeska is considering removal of four shut-in pump stations, which cost $1 million a year each to maintain, and dismantling unneeded tanker berths and oil storage tanks at the Valdez Marine Terminal.

The pipeline was designed to transport 2 million barrels per day of crude and natural gas liquids, which it did from 1979 until 1988. Since then, oil flow has dropped to about 1 million barrels a day.

"Our energy business in Alaska is right at the edge of competitiveness," Wight told the Alaska Support Industry Alliance last month in Anchorage. "Alaska has huge energy resources, but to make new oil fields on the North Slope economically viable, costs must be trimmed and Alyeska must play a key part in that reduction."

If new discoveries are made on the North Slope, Wight said the remaining pump stations could be reconfigured to transport up to 1.5 million barrels a day of oil through the pipeline. Chemical drag-reducing agents also would help.

Updated: 
04/14/2002 - 8:00pm

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