Apologies for not looking at the responses for a few days but my wife surprised me with a weekend in Walpole, WA. Part of the world not seen before and staggeringly beautiful.
I'll address things quick...
1. That is correct. In my time there the blends were always in the same ball-park API spectrum to each other, which meant that in the aggregation scheme into Alyeska, the discounts/premiums were also always in that ball-park. The 88E crude API I am seeing being talked about is in the mid 40s - which is way off the scales seen in my time. So my commentary, also in relation to Caelus, was of crude that is beyond the 40s. Or even high 30s. I'm almost in a bind as to whether I should unearth a few boxes to find the TAPS unitisation and transportation agreement to see what the high and low book-ends on API allowances (and therefore part of the premium/discount formula) actually are. Would be interesting,. I'm sure through the various amendments they made to the scheme, that they captured a wider spectrum that what was actually going into TAPS in my time.
2. It is not heated. As I explained in more than one post, the crude has to be circulated to keep it flowing. That is not heating. And I think that is what the story alludes to - just keeping viscosity through movement. I have a tear-drop of crude here from Uganda and it stays solid in stillness, but if I shake that container, the crude becomes fluid. Same concept, except that Ugandan crude is waxy, whereas AK crude is in the damn cold. Anyways, the heat exchangers are there for ground stability, not oil movement.
3. I think I answered in Point 1. Prudhoe Bay was around and below 30, this stuff is 45. Now I also said that is not so much a technical hurdle, only a timing / contractual / commercial one. That is, the current aggregation and unitisation of crude into TAPS does not, to the best of my knowledge, go so far up the API spectrum. So it will mean that whatever is currently theoretical will need to become reality that the current contract probably does not do a good job of capturing that reality. This means negotiation, amended contracts and more stacking of hands which means two things... time and money.
So I do not disagree with any of your points, but I am trying to put some reality into the conversation. I like all y'alls optimism - I love it actually - but I also look at what is real on the ground there, and google is not always the answer.
Thanks to all. This is great.
88E Price at posting:
2.1¢ Sentiment: None Disclosure: Not Held
(20min delay)
