Leak forces BP to shut a key pipeline

SHARES in BP could come under pressure today, after the oil major was forced to shut down nearly all of its output on a pipeline in Alaska following a leak.

The firm has closed down 95 per cent of production from North America’s biggest oil field in Prudhoe Bay, which could result in the loss of up to 15 per cent of US crude.

The cause of the leak on the 800-mile Trans-Alaska Pipeline System is currently being investigated, and comes at a time when BP is still attempting to recover from the fallout from the oil spill in the Gulf of Mexico.

The shutdown of the pipeline could lead to a jump in oil prices, as it accounts for as much as 15 per cent of US crude oil production, and is the only line carrying oil to market from the expansive Prudhoe Bay field.

However the oil market is said to be better equipped to withstand the shock of the closure than in 2006, when fears of corrosion on the Prudhoe Bay pipeline led to BP reducing production, in turn pushing oil prices up.

Pipeline operator Alyeska Pipeline Consortium, in which BP owns a 46.93 per cent stake, shut down operation at 8:50am on Saturday, after workers discovered oil leaking into a basement at a pump station.

Oil firm ConocoPhillips owns a further 28.29 per cent of the line, ExxonMobil 20.34 per cent, Chevron 1.36 per cent and Koch Alaska Pipeline Company 3.08 per cent.