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Explorer may change strategy for off-spec jet

24 Jan 2018 20:44 GMT
Explorer may change strategy for off-spec jet

Houston, 24 January (Argus) — Explorer Pipeline may change its specification requirements for jet fuel at the point of injection in order to address a long-running quality problem with fuel delivered into the US midcontinent.

Explorer told Argus it is evaluating changes concerning tube ratings and differential pressure at the origin points. Tube ratings relate to the Tube Deposit Rating, which is part of the jet fuel thermal oxidation test (JFTOT), and is administered by visually assessing the thickness of the deposits that the jet fuel leaves on a heater tube after passing through it at a fixed flow rate. Differential pressure measures the drop in pressure in a pipeline when the fluid passes through a valve. Shippers have been aware of the latter changes under consideration for the past year, according to sources familiar with the matter.

The pipeline company's new approach comes after aviation regulators and an industry association said there was a the need to address various jet fuel quality issues which impact how airplane engines run, as well as airlines' cost management. This includes a white paper from industry group Airlines for America (A4A) urging the US Federal Energy Regulatory Commission (FERC) to increase oversight and transparency of pipeline data submissions to prevent over-recoveries and excessive returns.

A4A is calling for transparency on rate-setting because airlines are highly dependent on pipeline jet shipments, and existing pipelines that deliver to major airports, such as Explorer and O'Hare International Airport in Chicago, are at maximum shipping capacity while jet demand is set to grow. A4A argues that the current level of oversight and transparency doesn't offer incentives to pipelines to address infrastructure development, which may be needed to address quality issues that disrupt product supply to airports.

The spec issues in jet first gained market-wide attention in March 2015 and was known to affect jet fuel that had been injected into both the Colonial and Explorer pipelines at the US Gulf coast. When the shipped jet fuel was taken off the pipelines at destinations north of Tulsa, Oklahoma, there were intermittent failures to pass the JFTOT at 275°C.

Around that time Explorer reduced its jet shipping volumes by 30-50pc to help mitigate the bottleneck effect at terminals where shippers were treating the off-spec jet fuel to resolve the issues.

In July 2016 Explorer said it determined the problem was originating from the US Gulf coast, and was likely the result of commingling batches for shipment on the line.

In April of 2017, Explorer further adjusted individual allocations to coincide with planned maintenance, as well as the reemergence of specification issues.

In November 2017, the Federal Aviation Administration (FAA) disseminated a special safety notice saying the agency was investigating jet fuel contamination issues in the central US. The FAA described engine problems arising from jet fuel contamination, which included blockages in fuel filters, fuel nozzles and fuel tanks that lead to engine flameouts and other erratic engine operations. The exact geographic scope and source of the contamination was unknown at the time the FAA distributed the notice.

Explorer said it is not seeing the same prevalence of off-spec jet fuel so far this year as it did with thermo-stability issues in the jet fuel from summer and fall of 2017.

Explorer did not elaborate on timing of a new specification roll-out, or on the details of the potential specification change.