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Alaska oil pipeline restarts, normal production resumes.

Alaska's crude oil pipeline resumed operations, restoring the flow of about 12 per cent of US oil production nearly a week and a half after the line was shut due to a leak.

A bypass line to circumvent the leak was completed earlier and operators are expecting to ramp up throughput to 500,000 barrels per day (bpd) within 24 hours, Alyeska Pipeline Service Co said in a statement.

A spokesman said it would take days to reach its average operating rate, which was 640,000 bpd in December.

Producers including BP, ConocoPhillips and ExxonMobil got permission to resume normal output afternoon, and will gradually increase output over the coming days, said Alyeska spokeswoman Michelle Egan.

She said the line was drawing down inventories to ramp up output on Monday.

Oil futures rose slightly trading. ICE Brent for March added 22 cents to $97.65 a barrel. The leak, discovered on January 8, had forced Alaska's oil producers to slow output to a trickle, helping drive oil prices to near $100 a barrel, their highest in two and a half years. Prices fell by more than half a per cent, the biggest one-day decline since before the line was shut. "Crews completed work on the bypass piping at Pump Station 1 and at 4:04 a.m.

Alaska time notified the Operations Control Center that it could prepare for restart," Alyeska said in the statement. "The OCC initiated forward flow of crude oil at 10:18."

The 800-mile (1,280-km) line was fully shut down from Jan. 8 to Jan. 11 while crews worked to build a bypass line.

It restarted briefly last week at a rate of less than 400,000 bpd to avoid freeze-up and storage problems along the line and in the oil fields, but it temporarily shut again on Saturday to allow workers to install a 157-foot bypass line that will route oil around the leaking section.

During the second shutdown, oil producers on the North Slope were asked to reduce output to 24 per cent of normal rates, then 16 per cent and ultimately 12 per cent.

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Publication:Oil & Gas News
Geographic Code:1U9AK
Date:Jan 24, 2011
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