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Press reports have re-emerged in La Estrella’s insert, The Panama Star regarding reversing the Trans-Panama oil pipeline that runs from Chiriqui to Bocas del Toro. British Petroleum has signed an agreement with Petroterminal de Panama S.A. to modernize and reverse the pipeline in order to ship crude oil from Angola to refineries on the United States West Coast.

Trans-Panama Pipeline

When the United States developed the oil fields on Alaska’s North Slope the oil was transported to the South side of Alaska by a huge pipeline. Then the oil was transferred to super tankers and transferred to Panama. Initially the oil was pumped into smaller vessels to pass through the Panama Canal. Then a pipeline was built to transport oil from near Puerto Armuellas in Chiriqui to Bocas del Toro from where it was shipped to refineries on the US Gulf Coast.

When Alaska’s North Slope production diminished the Panama pipeline was shut down in 1996. In 2003 the pipeline was reopened to move crude oil from Ecuador across Panama to refine on the US Gulf Coast.

The pipeline is jointly owned and operated by Norville Industries and Panama as Petroterminal de Panama S.A. The Panama Pipeline has the capacity to move 860,000 barrels of oil a day and is 81 miles long. The pipeline starts at Charco Azul near Puerto Armuellas in Chiriqui and goes to Chiriqui Grande in Bocas del Toro. The capacity of the pipeline exceeds 860,000 barrel per day.

According to Wikipedia, “In May 2008, British Petroleum signed an agreement with Petroterminal de Panama S.A., according to which the pipeline will be modernized and reversed to ship British Petroleum 's Angolan and other crude oil to the U.S. West Coast refineries. Modernization works are expected to take two years. According to the agreement, British Petroleum will acquire 5 million barrels of storage capacities and commit to secure shipments of 65,000 barrels per day.”

Puerto Armuellas Refinery

Oil and Puerto Armuellas are periodically in the news. There is the possibility that Occidental Petroleum will build a refinery on the Pacific coast of Panama using the deep water around Puerto Armuellas for docking tankers.

A new aspect of Panama and oil is the possibility of a megaproject to rival the Panama Canal Expansion. Occidental Petroleum and Qatar Petroleum are planning to invest $9 Billion (US) to build a refinery at Puerto Armuellas. According to La Prensa, Panama, September 27, 2008 the project in under a four year long government study of environmental safety and economic feasibility. When completed the refinery would be capable of processing 350,000 barrels of crude oil per day.

It appears that British Petroleum will reverse the Trans-Panama Pipeline before any of the government studies are done regarding a refinery. However, talk about the refinery also involves moving oil across Panama to refine. The refinery would sell refined products to the West Coast of the Americas.