Ecuador halts crude pipelines due to landslide, says exports unaffected

QUITO (Reuters) – Ecuador halted operations of its two crude oil pipelines due to a landslide late on Tuesday in the country’s Amazon region, but will use inventories to ensure oil exports and domestic fuel production continue, the energy ministry said on Wednesday.

The incident also caused an oil spill near the Coca River in Ecuador’s Amazon region, the ministry said, adding that the government had set up containment barriers to avoid “major impacts.”

As of Monday, the state-run, 498 km (309 miles) SOTE pipeline pumped an average of 340,165 barrels per day (bpd) from the Amazon oilfields to the Esmeraldas port, while the Heavy Crude Pipeline (OCP), operated by private oil producers, pumps an average of 173,086 bpd, government data show.

State-run oil company Petroecuador said in a statement that the landslide caused a drop in pressure in the SOTE pipeline, prompting it to suspend operations on Tuesday. OCP said it had detected a rupture in the pipeline due to flooding of the Coca river related to the landslide.

“Exports will go on as normal, with volumes stored in [the ports of] Balao and Esmeraldas, according to the program established by Petroecuador,” Energy Minister Rene Ortiz said in the statement, adding that fuel supply to the domestic market was guaranteed.

The statement added that the incident also affected a state-run pipeline for domestic fuel transport, and that repairs to the two pipelines could take 2-3 weeks. It said the government would construct a temporary pipeline in the affected area to keep the crude flowing.

OCP gave no timeline of when its pipeline could be back online.

Petroecuador said it has inventories of some 2.5 million barrels of Oriente crude stored in Balao.

The incident comes as the Andean country’s cash-strapped government is struggling with a plunge in crude prices worldwide as well as an outbreak of the new coronavirus, with some 4,000 confirmed cases of COVID-19, the disease caused by the virus.

Ecuador currently produces some 530,000 bpd of crude, between state-run Petroamazonas’ fields and those fields operated by private companies.

Reporting by Alexandra Valencia; Writing by Luc Cohen; Editing by Chizu Nomiyama, Bill Berkrot and Sonya Hepinstall

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