Colonial Pipeline Allows Port Arthur Refiners to Ship Fuel after Harvey

Colonial Pipeline, the largest fuel system in the United States, said on Monday that Port Arthur, Texas refiners can use their own pumps as a temporary solution to get gasoline and other products into its main lines.

 

Flow rates on Colonial's lines, which supply more than 3 million barrels a day of fuel to the populous U.S. east coast, have been sharply reduced after Hurricane Harvey caused massive floods and damaged supply points, including at Port Arthur. The Port Arthur facility connects directly to Total and Valero's refineries in Jefferson County, Texas.

 

Traders said that while Colonial's move may help resume shipments from Port Arthur, flow rates through the line overall would still likely remain low until repairs are complete.

 

Colonial did not disclose current flow rates.

 

Repairs at the Port Arthur injection point are expected to last through the end of the month, Colonial told regulators in a filing.

 

Since that station will be inoperable until the end of September, the alternative is to get product from there to Hebert, Texas by allowing shippers to "use their own booster capacity to flow product," the company said. From Hebert, fuel will ultimately flow into Colonial's main line.

 

Without fuel shipments from Colonial, customers throughout the U.S. Southeast and Northeast would have to look elsewhere for gasoline and diesel. The pinch on supply due to Harvey caused sharp spikes in fuel prices after the storm landed in late August.

 

Pump stations are critical to moving product through pipelines, as they boost internal pipeline pressure, increasing the speed of slow-moving oil and other products. Booster pumps typically move product from the storage tanks at the station into the main line.

 

Colonial restarted parts of its main distillate and gasoline lines between Houston and Hebert, Texas, early this month after Harvey caused supply disruptions and flooding.

 

Gulf Coast facilities are still recovering from the devastating effects of Harvey, which hammered Louisiana and Texas for several days, shutting key infrastructure in the heart of the U.S. energy industry.

 

Total SA may begin restarting its 225,500 barrel per day (bpd) Port Arthur refinery this week, said Gulf Coast market sources on Monday. A spokeswoman said refinery personnel were working on safely restarting the refinery and preparing for previously planned maintenance.

 

Valero Energy planned to resume normal operations at its 335,000 bpd Port Arthur refinery by Monday for the first time in nearly three weeks, sources familiar with operations said Friday.


(Reporting by Devika Krishna Kumar; editing by Diane Craft)