BP may ask regulators this week to begin process of restoring North Slope pipeline

Tuesday, September 12th 2006, 10:27 am

By: News On 6

WASHINGTON (AP) _ BP PLC plans to ask federal regulators this week to resume operation of a segment of its pipeline so further tests can be made in hopes of restoring full production on Alaska's North Slope, a company executive told a Senate hearing Tuesday.

Robert Malone, chairman of PB America Inc., said hundreds of tests on the pipeline segment, shut down after extensive corrosion was found in early August after a spill, ``have shown little corrosion'' and that damaged segments can be bypassed.

If remaining inspections ``show that the line has integrity we will request permission to restart the line,'' likely this week, said Malone. He cautioned that further tests will still have to be made before full oil flow could resume.

Any resumption of the system will have to be approved by the Transportation Department's Pipeline and Hazardous Materials Safety Administration.

Thomas Barrett, the agency's chief, said in remarks prepared for the Senate hearing that the agency is ready to hear BP's request for resuming operation.

``We recognize the importance of these pipelines to the nation's oil supply. ... But at the same time we must be assured that even a temporary, limited restart can be operated safely before it can proceed,'' Barrett said.

The shut eastern leg of BP pipeline system has cut production from the Prudhoe Bay fields in half to 200,000 barrels a day. The western leg had been restored earlier.

Malone, testifying before the Senate Energy and Natural Resources Committee, apologized for the pipeline corrosion problems that have interrupted the flow of oil from Alaska.

``BP has fallen short of the high standards we hold for ourselves, and the expectations that others have for us,'' said Malone.

Sen. Pete Domenici, R-N.M., the panel's chairman, opened the hearing by saying that the discovery of extensive corrosion, resulting in oil leaks, from BP's pipeline system was ``inexcusable'' and ``a black eye on BP.''