Peru crude pipeline struck by rupture: UpdateOREANDA-NEWS. June 28, 2016. Peru's northern oil pipeline suffered its third rupture this year, prolonging a restart of the strategic artery.

PetroPeru operates the 1,110km (660mi) pipeline that has been out of service since February 2016.

PetroPeru confirmed the new break on 25 June and said it is taking remediation actions. The company said today the spill amounted to an estimated 477 bl.

There is no estimate for resuming operations on the pipeline, but an earlier target of early July appears to be off the table for now.

Most of the heavy crude pumped through the line is processed at the 65,000 b/d Talara refinery on the northern coast or exported from the Bayovar terminal.

PetroPeru was forced to stop pumping crude through the line after back-to-back ruptures in January and February spilled around 3,000 bl into rivers in the Amazonas and Loreto regions. The Peruvian government declared health emergencies in dozens of indigenous communities to facilitate remediation. Finland's Larsen Marine Oil Recovery was hired for the clean-up.

Although the pipeline is commercially idle, some oil had been pumped into the system to facilitate the work of inspection machinery, or smart pigs. PetroPeru said this was the first time in 18 years that it would deploy smart pigs to evaluate the full length of the pipeline, which has seen more than a dozen ruptures since 2010.

Closing the pipeline forced Canada's Pacific Exploration and Production to suspend production on Block 192, which it operates under a two-year license that started in August 2015. Block 192 had been producing an average of 10,000 b/d before it was shut down.

A joint venture of France's Perenco and Vietnam's PVEP more recently suspended production on block 67, which had been producing around 2,000 b/d. At risk for suspension is 4,000 b/d block 8, operated by Argentina's Pluspetrol.

Peru produced a total of 34,000 b/d in the first 26 days of June, compared to 42,000 b/d in May and nearly 60,000 b/d in June 2015.

The latest pipeline breach is a reminder of the challenges that President-elect Pedro Pablo Kuczynski will face after he takes office on 28 July.

Kuczynski, an energy minister in the 1980s who has promised to revitalize PetroPeru, will need to move quickly not only on the pipeline, but also other major issues facing the company, including the delayed \\\$3.5bn upgrade of the Talara refinery, and figuring out how the company will be able to manage block 192 when Pacific's contract expires in 13 months.

Legislation approved last November by the congress requires PetroPeru to take over management of the block in August 2017.