Colonial Pipeline Co [COLPI.UL] said on Tuesday its main gasoline pipeline, a crucial supply source for the U.S. East Coast, could reopen as early as Saturday after an explosion in Alabama killed one worker and injured five others.
The blast on Monday occurred several miles from its biggest gasoline spill in nearly two decades in September that caused a 12-day interruption in the flow of about 1.3 million barrels per day of the fuel from the refining hub on the Gulf Coast to the Northeast.
The shutdown will restrict gasoline supplies to millions of Americans in the Southeast and possibly the Northeast. The Northeast could be less affected since it can get supplies via waterborne shippers.
U.S. gasoline futures soared 15 percent to the highest since June on the shutdown, but pared gains sharply to 4.6 percent to settle at $1.4841 per gallon after Colonial said it could reopen the pipe by the weekend.
Colonial said it would explore potential options to operate parts of its gasoline pipe, called line 1, and would evaluate shipping gasoline on the distillates pipe, line 2, which was briefly shut overnight by the incident.
During the September outage, the company shipped some gasoline on the line that usually transports diesel and jet fuels.
“If they are properly motivated, they can do the investigation and get the line up a lot quicker than the last one,” said Richard Kuprewicz, president of Accufacts Inc, a pipeline advisory firm, referring to the September outage.
“My experience tells me that even with a fatality, I would not expect this to go as long as the last one.”
Shippers using the East Coast supply artery were, however, bracing for a longer shutdown as Colonial said it was hard to predict a repair schedule.
Shippers and fuel companies were scrambling to secure supplies via sea or other alternatives to get fuel to the East Coast. Fuel retailers and consumers are likely to be most affected, though prices at the pump have not risen yet, even as gasoline futures have spiked.
Flames shoot into the sky from a gas line explosion in western Shelby County, Alabama, U.S., October 31, 2016. REUTERS/Marvin Gentry
North Carolina Governor Pat McCrory said in a press conference the state gets 70 percent of its gasoline from the Colonial Pipeline and that he was exploring options for an extended outage.
North Carolina is one of several states that relaxed environmental and transportation rules for gasoline during the September outage.
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