Alaska Gov Creates Energy Infrastructure Oversight Body

Dow Jones Newswires

CALGARY Oct 9, 2006 (Dow Jones Newswires)

Alaskan Governor Frank Murkowsi on Friday created a new body to oversee the state's oil infrastructure operations.

The new Lease Monitoring and Engineering Integrity Coordinating Office, or LMEICO, will be part of the Department of Natural Resources, which oversees Alaska's oil and gas operations. The new office will oversee a multitude of agencies, including those responsible for Alaska's North Slope oil fields and the export terminal at Valdez.

"It has become very clear that the State of Alaska should have a more comprehensive oversight program for (its) oil and gas production and transportation infrastructure," Murkowski said.

Alaska's monitoring of its crude infrastructure network has been much criticized in recent months. In August, BP (BP.LN) was forced to partially close its 400,000-barrels-a-day Prudhoe Bay field, after severe corrosion was discovered in part of its Alaskan pipeline network. The shutdown followed a previous leak at a BP-operated pipeline in March.

"The pipeline maintenance problems ... have revealed the gaps in government oversight," Murkowski said. "Our objective is now to close those gaps."

Mike Menge, commissioner of the Department of Natural Resources, said that LMEICO's responsibilities will include performing risk assessments on all petroleum infrastructure; reviewing all facility designs, operations and maintenance programs; and inspecting pipelines.

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