'Tubular goods' flow through port

Steve Sautel, logistics coordinator for BP Alaska, was there to greet a cargo ship that had sailed across the North Pacific Ocean, bringing a vital commodity and a new style of doing business to the state.

"It was a great feeling," he said, "to see the hatch open up and see pipe coming out."

Yes, pipe. A lot of it.

So far, three ships have made unusual stops to the Port of Anchorage to deliver a total of 17.6 million pounds of well tubing and casing, what folks in the energy industry term OCTG -- oil country tubular goods. The latest arrived in early January.

That such ships come directly to Anchorage is something new, the result of a lot of collaboration among BP procurement managers, the Anchorage port, Japanese pipe maker Sumitomo Metals and its subsidiaries in Alaska.

The direct imports are helping save time and money as BP prepares to drill ultraextended-reach wells to tap its Liberty offshore oil deposit, and continues development drilling in Prudhoe Bay and other North Slope fields.

ROUNDABOUT JOURNEY

Usually, pipe for BP's operations in Alaska takes a circuitous route to get here.

Pipe from a variety of steel mills generally goes first to Houston, Texas, or sometimes Washington state.

From Houston, the pipe proceeds by railroad to the Seattle area, where the rail cars are loaded onto barges bound for the Alaska port of Whittier.

From there, the Alaska Railroad delivers the pipe to either Anchorage or Fairbanks, with trucks hauling it up the rugged Dalton Highway to feed drilling rigs on the Slope. The full journey can take weeks.

Sautel and Bob Talbott, BP Alaska's chief procurement officer, began to think about a better way, in keeping with BP's recent efforts to work with suppliers and contractors on controlling costs and doing things more efficiently.

Liberty presented the opportunity to import pipe directly to Anchorage, Talbott said.

That's because of the volume of pipe Liberty will require for its extreme horizontal wells, some of which are expected to reach up to eight miles out to pierce a reservoir under the Beaufort Sea with an estimated 100 million barrels of recoverable oil. A powerful Parker rig already is on site, with drilling expected to start this spring.

Liberty demands big enough loads of tubing and casing to justify cargo ships making stops in Anchorage, Talbott said.

ALASKA CONNECTIONS

The pipe arriving at the Port of Anchorage comes from Sumitomo Metals, a major pipe manufacturer in Japan.

Sumitomo Corp. of America in 2003 won a contract to provide tubular goods and logistical services to BP in Alaska, which led to the founding of a local Sumitomo subsidiary, Tubular Solutions Alaska.

Tubular Solutions coordinates BP's pipe stock, managing the oil company's pipe yard in Fairbanks, Talbott said.

Another local Sumitomo company, Unique Machine, bills itself as "Alaska's largest machine shop." It provides critical services such as threading, and has the capability to work with the large-diameter pipe required for Liberty, Talbott said.

North Star Terminal & Stevedore Co. workers unload the pipe from the ships, and Sourdough Express trucks it away.