Updates throughout.
Colonial Pipeline made "substantial progress" overnight preparing to replace a damaged segment of a critical pipeline supplying gasoline to the US Atlantic coast and southeast, the company said today.
Product continued to burn this afternoon as crews excavated the pipeline and prepared to drain gasoline that remained in the 1.3mn b/d Line 1 at the site of a deadly explosion west of Helena, Alabama. The company maintained plans to replace the damaged portion and restart service by noon ET on 5 November on the line running from the Houston, Texas area to Greensboro, North Carolina.
Workers today prepared to extinguish the remaining fire and remove product from the line. Once drained, workers will remove the damaged segment and permanently repair the pipe. Colonial estimates it lost 4,000 bl of gasoline in the accident, with most of it burned.
Crews also excavated the distillates-bearing Line 2 and determined it was undamaged by the explosion earlier this week.
The 31 October blast killed one contractor and injured five others. The nine-person crew was preparing the pipeline for a planned replacement of a nearby bypass constructed in September to end a 13-day outage that was triggered by the discovery of a leak. Colonial still plans to complete that repair project by mid-November, the company said. It had worked with the contractor, LE Bell, for more than three decades, according to a spokesman.
The pipeline moves gasoline from Texas and Louisiana refineries to terminals throughout Alabama, Georgia, Tennessee and the Carolinas. Shippers can move product on from Greensboro through the rest of Colonial's 5,500-mile (8,851km) system into the New York Harbor market.
The system provides a key baseline of supply to the northeast as the often cheapest path from the largest US refining center to the New York market. Customers become more dependent on domestic and imported waterborne shipments without the system, and may send trucks hundreds of miles to reach terminals still supplied with fuel to refill retail stations.
US retailer Murphy USA chief executive Andrew Clyde called the September outage "unprecedented", and said it led to local outages in Alabama, Georgia, Kentucky, Tennessee and the Carolinas.
"We brought in trucks from as far away as Las Vegas to supply our stores," he said during a quarterly earnings call.
But the latest outage looks much different, he said. Murphy terminals had higher inventories before this week's accident compared to September, and it appeared the outage would be shorter, he said.
Wariness over Colonial's stated restart plans complicated shipping decisions in the southeast. The pipeline company had given similar guidance immediately after discovering the September leak, only to extend the outage for almost two weeks as benzene fumes stirred from gasoline-soaked soil slowed excavation and repair efforts.
The low availability of trucks and a shortage of tankers authorized to travel between US ports under the Jones Act has driven up the cost of alternatives to the pipeline.
Suppliers in the region who gamble on the pipeline's return this weekend could face shortages and a lack alternatives if workers miss the repair schedule. But suppliers who do charter alternatives would be stuck with steep costs if the pipeline returns to service.
