Colonial Pipeline Expects to Restart Damaged Section of Pipeline by Mid-Nov

Reuters, October 18, 2016

Colonial Pipeline said on Monday it would cut shipping volumes while it works to restart the section of its main gasoline conduit that was damaged after its biggest gasoline leak in nearly two decades in Alabama last month. The company expects to fully restart the damaged part of artery by mid-November.

The damaged section of the 1.3 million-barrel-a-day line that connects the refining hub of the Gulf Coast to the East Coast was shut for more than 12 days after a leak was discovered on Sept. 9. A bypass line was constructed to restart operations while the company repaired the main conduit.

Allocations on Line 1 - the main gasoline line on the biggest refined products system in the United States - will be reduced by about 20 percent for 10 days.

U.S. gasoline crack spreads, a key metric for margins for U.S. refiners, jumped by 5.3 percent to $13.32 a barrel on news of the reduced allocations. New York Harbor gasoline for prompt delivery were also said to be offered higher.

Colonial was required to submit a detailed restart plan to federal authorities, and must wait for approval before it can restart the damaged section of the original Line 1.

"A draft restart plan has been submitted to PHMSA, which they will review and approve prior to constructing and reinstating line 1 in original service," A Colonial spokeswoman said in an emailed response.

The U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration (PHMSA) said on Friday that Colonial must cut pressure on the line by 20 percent until it can ensure the line can safely operate at full capacity. On Monday, PHMSA did not say whether it had signed off on the restart plan. "We continue to work with the operator to address the concerns outlined... and cannot speculate on a restart at this time," a spokeswoman for PHMSA said in a statement emailed to Reuters.


(Reporting by Devika Krishna Kumar in New York; Editing by Simon Webb, Bernard Orr)

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