Exxon to replace fleet in Alaska

Company working to meet deadline for double-hulled tankers

Posted: Friday, July 08, 2005

ANCHORAGE - Exxon Mobil said it will replace its Alaska fleet of single-hulled oil tankers with double-hulled vessels.

According to the plan, Exxon will first take over and refurbish two aging double-hulled tankers now hauling North Slope crude oil for BP. The tankers, the Kenai and the Tonsina, will be overhauled in a Singapore shipyard, Exxon said.

The company's shipping subsidiary, Houston-based SeaRiver Maritime Inc., currently runs four tankers between Valdez and West Coast refineries. All the ships are single hulls.

Exxon, with the other major oil companies in Alaska, ConocoPhillips and BP, is under time pressure to comply with federal law requiring that all oil tankers be double-hulled. The law generally requires double hulls by 2015, but many ships now in service have much earlier expiration dates based on their age and other factors. Exxon has one Alaska tanker facing retirement in October and another in March.

The idea behind double hulls is that they might reduce the size of spills should a ship run aground.

SeaRiver spokesman Ray Botto said the purchase of the BP ships is an interim step in a broader but still incomplete plan to upgrade the company's Alaska fleet. The plan could include building new, double-hulled tankers, he said.

Exxon is lagging well behind Conoco and BP, which together are spending about $2 billion to build double-hulled tankers. Since 2001, Conoco has put four such ships into service and BP two, with both companies expecting more new tankers in coming months.

Exxon worked a deal with a San Diego shipyard in 2003 to design a new tanker, but the oil giant hasn't placed an order for a ship.

Because BP has added new ships to its fleet, it no longer needs the Kenai, built in 1979, and the Tonsina, built in 1978, said Anil Mathur, president of BP's shipping affiliate, Alaska Tanker Co. of Beaverton, Ore.

The two ships originally weren't built with double hulls, but they were converted when operators stopped filling the outer cargo tanks with crude oil, effectively turning single-hulled vessels into lower-capacity double hulls, Mathur said.

Neither ship faces a mandatory retirement date and legally can sail indefinitely as is, Botto said. But SeaRiver plans to make the ships much better by overhauling their hulls, navigation gear and other systems in Jurong Shipyard in Singapore, he said.

SeaRiver plans to rechristen the Kenai as the Sierra, and the Tonsina as the Kodiak, Botto said.

SeaRiver representatives recently disclosed their plans to the Prince William Sound Regional Citizens' Advisory Council, a Valdez-based industry watchdog group formed in the wake of the 1989 Exxon Valdez oil spill, which released 11 million gallons of crude into the sound.

The group's executive director, John Devens, said he approves of Exxon's taking over the two BP tankers.

"It seems to be an adequate interim solution and probably the only one they've got," Devens said. "We don't really understand why it took them this long to get started on their double-hulled fleet."

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