Ecuador races to divert oil lines vulnerable to erosion

State-owned PetroEcuador and foreign oil producers are diverting more segments of two crude export pipelines vulnerable to severe erosion along the Coca river and tributaries.

PetroEcuador is currently working on a seventh bypass of its 360,000 b/d Sote pipeline at San Luis in Napo province. The 503km (313mi) line is operating normally, but throughput will be briefly suspended to connect the new segment once the work is completed in two to three weeks, the company said.

"We hope this is the last bypass, but it depends on the erosion," a PetroEcuador official told Argus.

The 450,000 b/d private-sector OCP pipeline is preparing to start a six-month project to install a 4km permanent bypass at kms 95-98 around San Luis as well. Eight temporary bypasses and two definitive ones were already constructed in the area since last year.

The 485km OCP is owned by China's state-owned Andes Petroleum, Spain's Repsol, US independent Occidental, Argentina's Pampa Energia and UK-French independent Perenco.

The bypass projects of both pipelines have been delayed in recent weeks because of protests in San Luis, where local communities are demanding more local hires to do the work.

Torrential rains, uniquely regressive erosion and the collapse of the San Rafael waterfall led to ruptures on the two lines in April 2020 in the throes of the Covid-19 pandemic and oil market turmoil. The catastrophic events slashed the former Opec country's oil production and led to force majeure declarations on exports.

Since then, Sote and OCP have installed multiple pipeline bypasses to mitigate further risk, and are closely monitoring risk levels. On 19-20 July, the OCP paused operations after heavy rains drove up water levels on the Papallacta river.

Climate risk?

The erosion is currently 7.9km from the 1.5GW Coca Codo Sinclair hydroelectric dam but is not advancing for now, Ecuador's state-owned utility Celec said.

The Chinese-built hydro plant is among numerous infrastructure projects dating back to the 2007-17 administration of exiled former president Rafael Correa that were later found to be structurally defective.

To minimize risk, Celec plans to shore up the site of the hydro plant's water collection.

A team from the US Army Corps of Engineers (USACE) visited the site of the erosion last week, the latest international cooperation to help the new government in Quito address the threat to vital infrastructure. Oil exports are Ecuador's main revenue source.

Ecuadorean officials told Argus the erosion is a natural phenomenon, along with the country's host of volcanic and seismic activity. But they do not rule out climate change for accelerating it and making heavy rains less predictable.

"One can't say for sure this is happening because of climate change, but what is clear is that there wasn't enough information when the pipelines were built many years ago, so maybe today they wouldn't have been built there," Ecuador's former oil minister Rene Ortiz told Argus in a recent interview.

Sote dates back to the 1970s, and OCP from 2003.

By Patricia Garip