Alaska's main oil pipeline was still expected to restart this week with plans to bypass a leaking section that forced the line to shut down on Saturday, idling 12 percent of U.S. oil production, a source familiar with its operations said on Tuesday.

Trans Alaskan Pipeline System operator Alyeska expects to bypass a leaky area along the 630,000 barrel-per-day, 800-mile (1,280 kilometer) line by installing a substitute stretch of pipe, the industry source told Reuters. Alyeska will await approval from the U.S. Department of Transportation (DOT) before resuming operations, he added.

On Monday, DOT's Pipeline and Hazardous Materials Safety Administration said the pipeline would not need its approval to be repaired and restarted. Regulatory approval sometimes delays pipeline restarts.

TAPS leaked a small amount of oil into the basement of a booster pump station and was shut down over the weekend. Although the shutdown was expected to be short, it helped drive gains in world oil prices this week.

U.S. benchmark light crude for February delivery rose 2 percent to $91.03 a barrel on Tuesday.

The pipeline is usually able to restart quickly, even after a spill. Last May, when several thousand barrels of oil spilled into a pump station, the line was forced to shut down for less than four days.

According to an update issued on Monday night by the Alaska Department of Environmental Conservation, about 18 barrels of oil have been recovered by cleanup crews from the booster pump building. Tests indicate that the leak or leaks are in the discharge piping, the DEC said.

Crews are working to drain the existing discharge pipe, seal it off and install a 157-foot bypass line, the DEC said. Alyeska has chartered aircraft to deliver needed parts and equipment to the North Slope.

Alyeska is owned by the companies which operate on Alaska's North Slope -- BP owns about 47 percent of the venture, while ConocoPhillips and Exxon Mobil hold 28 percent and 20 percent respectively.

The shutdown of Alaska's main oil pipeline poses only a minor threat to U.S. crude supplies, but any snag delaying its restart could send West Coast refiners scrambling for substitute crude and drive up prices.

(Reporting by Janet McGurty; Writing by Joshua Schneyer; Editing by Marguerita Choy)

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