04 November 2016, New York — Colonial Pipeline Co [COLPI.UL] is delaying the restart of its main gasoline line to Sunday afternoon from Saturday, the company said in a statement late on Thursday.
The gasoline pipeline, Line 1, was shut down by an explosion in Shelby County, Alabama, on Monday. The system carries 1.3 million barrels per day of gasoline from the U.S. Gulf Coast to the Northeast, supplying about 40 percent of the U.S. East Coast’s motor fuel needs.
The decision to delay the restart was based on “the newest information” the company had received, Colonial said in the statement.
Earlier, the company said that it had made “substantial progress” in removing fuel from the section of Line 1 that was damaged by the explosion.
“Once preparations for product removal are complete, the remaining small fire will be extinguished and ‘drain-up’ operations will commence,” Colonial said in the earlier statement.
The explosion, which killed one worker and injured five others, occurred several miles from September’s gasoline spill that interrupted Colonial’s main line flow for 12 days.
The company plans to remove the damaged section of the pipeline and install a new segment as a permanent fix. After the leak in September, Colonial installed a bypass line to circumvent the damaged section of the gasoline line.
U.S. gasoline futures fell sharply after Colonial’s statement on Thursday, ending the day down 1.6 percent and falling to as low as $1.4144 a gallon, the lowest level in more than a month. Prices were down 0.4 percent during Asian hours.
Retail gasoline prices ticked up for the second day in Georgia, one of the states most affected after Colonial’s spill in September. Prices at the pump in Georgia rose another 3 cents overnight to average about $2.22 a gallon on Thursday, according to motorist advocacy group AAA.
However, some analysts have said gasoline prices for the consumer are unlikely to spike as much as during the last Colonial outage, which squeezed supply and led to long lines.
The company said on Thursday its distillates line was not damaged by the blast.
The main distillates line, which had been shut as a precaution before being restarted, was excavated for visual inspection on Wednesday.
In September, Colonial temporarily hauled gasoline on its distillates line, which normally moves diesel and jet fuels, and restarted sections of the line before fully restoring service.
Several traders said they expect Colonial to do the same this time.
*Devika Krishna Kumar; Nithin Prasad, & Nallur Sethuraman; Editing – Chizu Nomiyama, Meredith Mazzilli, & Christian Schmollinger – Reuters
