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Colonial plans gasoline, diesel capacity expansion

19 Oct 2017, 8.54 pm GMT

Colonial plans gasoline, diesel capacity expansion

Houston, 19 October (Argus) — Colonial Pipeline will add 50,000 b/d of capacity to its southern gasoline- and diesel-bearing main lines by March 2019, the company said today.

Additions to the 1.4mn b/d Line 1 and 1.1mn b/d Line 2 running from near Houston, Texas, to Greensboro, North Carolina, would mark the first increases since 2013 on the largest products system connecting the US Gulf coast to the New York Harbor market.

A company representative could not be immediately reached for comment.

"Colonial continues to evaluate potential mainline expansion projects to meet demand for (US Gulf coast to Atlantic coast) movements," a notice disclosing the plan said.

The 5,500-mile (8,851km) Colonial Pipeline system connects US Gulf coast refineries to terminals throughout the southeast and Atlantic coast and the New York Harbor market.

Pump station upgrades and other relatively low cost improvements added 100,000 b/d of capacity to Line 1 and 75,000 b/d of capacity to Line 2 in 2013. The company also added 160,000 b/d of capacity to Line 3, connecting Greensboro to Linden, New Jersey, over two years around the same period.

But Colonial cast doubt on larger expansions, wary of building out a pipeline system for peak transportation fuel demand that would become difficult to fill over time. The company last March warned that resistance to its efforts to control demand that outstripped the system's capacity would not lead to expansion.

Heated demand for Colonial's main pipelines cooled this summer following months of poor arbitrage. Nominations for shipments on Line 2 fell below capacity in June. Line 1 nominations briefly slipped below capacity before resuming space rationing in August.

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