Houston (Platts)--4May2010/650 pm EDT/2250 GMT

BP is making progress on closing one of three leaks that has been releasing oil from its runaway Macondo exploration well in the Gulf of Mexico and hopes to reduce the leaks to two by later Tuesday, said Doug Suttles, BP's chief operating officer for the Americas.

"We've made progress on one of three points of leak," Suttles said during a conference call in Mobile, Alabama, after conducting an overflight of the oil spill now threatening the Gulf Coast as a result of the April 20 explosion aboard the Deepwater Horizon drilling rig.

Suttles said BP has managed to install a valve on one of three points of the leak at the Macondo wellhead, providing hope for reducing the flow, which has been estimated at 5,000 b/d.

He also said the company expects to have its first containment device in place in the next six days, with shipping expected to begin about noon Wednesday from its fabrication point at Port Fourchon, Louisiana.

The containment system represents BP's strategy for diverting the flow of crude from the well into a dome-like structure that would then pipe the oil to a vessel on the surface. The company will also continue to drill a relief well that might take 90 days to complete.

With its experimental containment system, BP is trying to modify something initially designed for use on shallow water wells following Hurricane Katrina in 2005, according to a fact sheet released by BP.

In those initial deployments after Katrina, operators lowered smaller containment domes over damaged wellheads so that divers could work on repairing them.

Working with the well intervention company Wild Well Controls, BP has used those shallow water domes as models for creation of this larger system that marks the first time for deployment in water depths where divers cannot assist the installation.

If BP succeeds in installation of this containment system, it will use Transocean's Deepwater Enterprise drillship to process and store much of the oil that might otherwise leak to the surface.

BP believes the containment system could collect as much as 85% of the estimated 5,000 b/d leak.

Computer drawings of the design as it might look in use resemble an overturned funnel with the drain tube pointing toward the surface for connection with the anchored ship.

Tuesday's press conference in Mobile began with an update on the spill response from Alabama Governor Bob Riley, who joined Suttles and Coast Guard Rear Admiral Mary Landry in the overflight of the spill area.

Riley said based on weather conditions, it will be a "few" more days before the oil slick reaches the Alabama coast.

"We'll be in pretty good shape here," Riley said, citing the work of the Alabama National Guard in applying booms and barricades for containment.

Suttles said BP has announced $25 million in block grants to help the states of Louisiana, Mississippi, Alabama and Florida activate their local response plans.

--Gary Taylor, gary_taylor@platts.com