PBF opposes Laurel pipeline reversal
The proposed reversal of a key Pennsylvania pipeline would increase costs for Pittsburgh residents and harm coastal refiners, PBF Energy said.
The US independent refiner, which operates 370,000 b/d of US Atlantic coast refining capacity as well as a 170,000 b/d refinery in Toledo, Ohio, warned against reversing the Laurel pipeline to move products from midcontinent refiners to central Pennsylvania.
"Changing that supply dynamic will lead to a less competitive environment overall, to the detriment of Pennsylvania business and consumers," PBF Holding president Matthew Lucy said in a 28 June letterto state regulators made public today.
Laurel operator Buckeye Partners proposed last year found committed shippers for a partial reversal of the 350-mile pipeline system running west from outside Philadelphia to the Pittsburgh market. Changing the pipe to move product east from Pittsburgh to Altoona, in central Pennsylvania, would give those markets access to cheaper products from Michigan and Ohio refiners running at high rates in relatively smaller markets, Buckeye has told the Pennsylvania Public Utility Commission.
Buckeye could not be immediately reached for comment.
Atlantic coast refiners consider the proposal a threat. Laurel offers the only pipeline route between Philadelphia and Pittsburgh. Rival transportation options, such as barges or trucks, come at higher cost. And a successful reversal to Altoona could someday lead to access for midcontinent refiners all the way to the larger Philadelphia market.
The 330,000 b/d Philadelphia Energy Solutions refinery, which has said it moved as much as 20pc of its production west across the pipeline system, and the 185,000 b/d Monroe Energy refineryin Trainer have both opposed the proposal.
A reversal could offer a new market for PBF's Toledo refinery. But fuel from PBF Energy's 190,000 b/d refinery in Delaware City, Delaware, already ships into the Laurel pipeline system.
"In summary, despite the fact that PBF Holding owns refineries in the midwest and Gulf coast that would potentially benefit, PBF Holding does not support Laurel's plans to reverse the direction of the Pittsburgh to Altoona segment of the Laurel pipeline due to the anti-competitive impact that such a reversal would have in the region," Lucey wrote.
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