Shuttle tanker sent to help with BP blowout



By Gary Taylor and Katharine Fraser in Houston, with Gary Gentile in Washington and Robert DiNardo in New York



June 10 - With 57,500 barrels of oil diverted from BP's runaway Macondo exploration well and collection hitting 15,000 b/d, heavyweight lightering help was headed to the Gulf of Mexico June 9 in the form of BP's Loch Rannoch shuttle tanker dispatched from the North Sea and set for arrival next week.

"The Loch Rannoch is a special vessel," said US Coast Guard Admiral Thad Allen in a June 9 press conference explaining the latest logistics for producing oil from the well at the root of the largest marine oil spill in US history.

Although oil continues to leak into the Gulf at the Macondo site in 4,993 feet of water about 40 miles from Venice, Louisiana, BP has continued to make progress with diversion of some of the oil through its Lower Marine Riser Package (LMRP) successfully installed June 4.

But Allen and BP have warned that no permanent solution will occur until the company completes a relief well designed to intercept Macondo by the middle of August.

While the company, the Coast Guard and an army of local volunteers fights the encroaching spill on the surface and along the Gulf Coast shores, BP needs a way to move its collected Macondo oil to refineries for production.

The company is using two drillships with combined storage capacity of 28,000 b/d to handle its growing Macondo production temporarily with small lightering vessels moving oil to shore while awaiting the arrival of the Loch Rannoch, Allen said.

As a result, the Gulf of Mexico will welcome its first large scale shuttle tanker operation with arrival of the 130,031 dead weight tonne, dynamically positioned shuttle tanker between June 12 and 15.

Because of its extensive network of pipelines and regulations against flaring of associated natural gas, the Gulf of Mexico has seen only emergency experience with shuttle tankers.

The US Minerals Management Service has approved limited use of shuttles with short-term flaring of natural gas during oil-production curtailments from hurricane damage to pipelines in the last few years.

And the agency also has approved the use of shuttles with a floating production, storage and offloading facility later this year at the Petrobras-operated Cascade project in the Gulf of Mexico.

As a permanent facility, Cascade will be moving its associated natural gas through a pipeline.

But operators historically have opted to use pipelines for oil delivery because they have to have them for gas production anyway.

Macondo's associated gas output is being flared under special emergency allowances from the MMS.

Allen and BP said the LMRP containment system collected 15,600 barrels of oil in the 24 hours before June 9, up from 14,842 barrels the day before and 6,000 barrels when the operation began.

During his press conference, the national incident commander also defended the government's estimate of 12,000 b/d-19,000 b/d leaking from the well by telling reporters: "I am the government and we are not low-balling."

Allen reminded reporters the government's flow rate technical group is working to update the estimate with that report expected by the end of this week or early next week (ON 6/9).

Elaborating in Washington DC, Deputy Interior Secretary David Hayes told a US Senate committee he hopes to have that new estimate "very, very soon."

The seven-member Flow Rate Technical Group has received a computer hard drive from BP containing high definition video of the wellhead and can now better determine how much of the flow is crude oil and how much is gas, Hayes said.

"We now have better information on the oil and gas ratio," Hayes told the Senate Energy and Natural Resources Committee. "That group...will come up with a much better estimate of how much is coming out of the riser."

Hayes said the group already has determined that the installation of the LMRP last week resulted in a lower increase in flow than expected, suggesting that the operation boosted oil output by just 4-5% rather than the 20% feared by BP and Allen.

Because installation of the LMRP cap involved cutting a bent riser atop the blowout preventer, Allen had warned that the operation might temporarily increase the flow by as much as 20% until BP could fully install the containment cap (ON 6/4).

The Flow Rate Technical Group told BP to surrender "very specific segments of the post-riser cut video," Hayes said. "They got the whole hard drive from BP. They are now reviewing the segments. We hope to have additional information very soon on that point."

Hayes said the data will also allow the group to review earlier estimates and come up with a more accurate estimate of how much has been leaking from the well since the April 20 blowout (ON 4/22).

Noting the importance of continued collection through the LMRP containment system, the federal on-scene coordinator released a letter, dated June 8, instructing BP to show the government that its collection system would be capable of running continuously with backup systems, including additional vessels.

"There should be no interruptions of the recovery effort while awaiting another recovery vessel to arrive on scene," US Coast Guard Rear Admiral James Watson wrote to Doug Suttles, BP America Exploration & Production's chief operating officer.

BP must deliver plans for "parallel" and "continuous" systems with an implementation timeline within 72 hours of receiving the letter, Watson added.

"Now that the so-called 'top hat' containment system has begun to capture and recover some of the oil escaping from the wellhead, it is imperative that you put in equipment, systems and processes in place to ensure that the remaining oil and gas flowing can be recovered, taking into account safety, environmental and meteorological factors," Watson wrote.

Watson further "instructed" BP to establish a system or systems "capable of safely collecting oil and gas flowing from the Macondo 252 well," adding the system "must have the appropriate redundancies to maintain complete collection rates in the event that operational problems are encountered in any part of the system."

If multiple vessels are to be deployed for collection and recovery, backups should exist so that any failure of a vessel or vessels does not stop continuous recovery of oil, Watson said.

"There should be no interruptions of the recovery effort while awaiting another recovery vessel to arrive on scene," he said.

In its June 9 informational update, BP mentioned a lightering vessel named The Massachusetts, which swung into action to take oil from the Discoverer Enterprise.

"The Massachusetts began lightering this morning and should finish early morning tomorrow," BP said. The company said lightering logistics had prompted a pause in collection briefly on June 8.

"Operations were stable with the exception of a short period, around 2 pm, when the Enterprise rotated to set up for lightering necessitating a reduction in choke setting and collected volumes," BP said.

The company also received another letter from Allen to BP CEO Tony Hayward seeking "additional information" on the company's handling of claims filed by businesses and individuals affected by the crisis.

The June 8 letter warns Hayward the US government "expects BP's claims process to fully address the needs of impacted individuals and businesses. We need more detail and openness from BP."

Allen's letter notes that while BP "has provided public statements on claims eligibility and summary data on claims processing," it has not yet responded to requests by Allen or various Gulf Coast states for further information.

The letter asked that the company "identify a senior official" who will work with Allen's representative on the claims process, Tracy Wareing, and representatives from the states "to provide increased visibility into the claims methodology and process."