Colonial expects Line 1 repair by 17 September: Update2
But the company left open in an afternoon update to shippers the potential for delays that would limit both gasoline and diesel shipments amid the repairs.
Reduced volumes of gasoline began moving on a parallel distillates-bearing trunk line today to bypass the site of a break in Alabama that released 6,000 bl gasoline, the company said.
Colonial had not yet excavated the affected portion of Line 1, a 36-inch line moving gasoline from terminals on the Texas coast to a Colonial terminal in Greensboro, North Carolina, the company said today.
The 5,500-mile (8,851km) pipeline system supplies products into Tennessee from Georgia and moves on from Greensboro up to Linden, New Jersey.
Colonial shut the Line 1 and distillates-bearing Line 2 on 9 September after a mining operation reported a strong gasoline smell in a remote area west of a terminal in Pelham, Alabama. Line 2 was restarted the next day, but Line 1 remains shut.
"If Line 1 delays are encountered, the Line 2 gasoline volumes will provide a limited volume compared to our normal five-day cycles," Colonial said in a shipping update. "Colonial will continue to ship gasoline on Line 2 if Line 1 is delayed."
Although the company began using Line 2 to help move some gasoline on to destinations, shippers on the distillates line can not switch their allocations to gasoline.
Gasoline flows on Line 1 have resumed between Texas and Boligee, Alabama, as well as from Pelham on to Greensboro, the company said today.
Movements along the Colonial system can command a premium, depending on the season. The lines operate at capacity year-round as shippers work to place cheaper US Gulf coast products barrels into the New York Harbor market without using costlier Jones Act tankers, or to preserve their historic access to the line by shipping barrels even when arbitrage has closed.
At least one Jones Act tanker has loaded with products heading from Texas City, Texas, to the New York Harbor since the pipeline was shut, according to ship tracking services.
Unseasonably large volumes of gasoline in US Atlantic coast storage should help mute broad supply concerns for the region. Total gasoline inventories in the week ended 9 September fell by 884,000 bl to 64mn bl — 5pc higher than the same week last year and almost 17pc higher than the ten year average.
Conventional gasoline stocks for the region over the same week increased by 894,000 bl to 27.5mn bl, or almost 8pc higher than the same week last year.
Total distillates in regional storage last week increased by 3.5mn bl to 66.6mn bl, or almost 9mn bl higher than the same week last year. Ultra-low sulfur diesel (ULSD) inventories increased by 2.7mn bl from the previous week to 53.7mn bl, an 8.5mn bl increase over the same week of 2015.