Colonial Expects Full Restart of Gasoline Line by Weekend after 6,000 bbl Leak

Reuters, September 15, 2016

Colonial Pipeline Co, the largest refined products system in the United States, on Wednesday increased its estimate of a gasoline leak in Alabama by about six times, but maintained it would restart the affected line completely by the weekend. The pipeline said about 6,000 barrels of gasoline spilled in Shelby County, Alabama, up from an earlier estimate on Tuesday of about 1,000 barrels.

The company shut down its main gasoline and distillates lines on Friday after discovering the leak. It has since restarted Line 2, its distillate line, and said it expected to restart Line 1, its gasoline line, completely by this weekend. Some traders said it might take longer than estimated for Colonial to restart Line 1 entirely, since the cause of the leak had not yet been determined.

Colonial spokesman Steve Baker said in an email that the company knew the exact location of the leak but the cause would take longer to determine.

"The pipe will be examined ... The weekend restart projection is unchanged," Baker said.

Colonial said it can currently operate Line 1 from Gulf Coast refineries, which helps them clear some of their product from storage. As a contingency plan, Colonial has said it would pump some gasoline on Line 2.

"We will be able to operate Line 1 from Atlanta onward once gasoline deliveries on Line 2 reach that point of our system," Baker said.

The gasoline released is contained in one of three nearby mine water retention ponds and there has been no threat to public health or safety, Colonial said on Wednesday. About 500 employees and contractors are working on the response and the company is preparing for excavation and repair. The Pipeline and Hazardous Materials Safety Administration (PHMSA) said it had deployed investigators to Shelby.Its pipeline safety experts are investigating the cause of the leak, a PHMSA spokesman said in an email.

The pipeline connects Gulf Coast refineries with markets across the southern and eastern United States through more than 5,500 miles of its pipeline system, delivering gasoline, diesel, jet fuel and other refined products. Colonial's Line 1, with a capacity of 1.2 million barrels per day, runs to Greensboro, North Carolina from Houston. The outage has weakened cash prices in the U.S. Gulf Coast over the last two days. Some traders said taking out supply to the East Coast could start to alleviate the glut of domestic gasoline in that region.


(Reporting by Devika Krishna Kumar in New York; Editing by Chris Reese and Andrew Hay)

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