Southeast US fuel deliveries resume: Update

Adds Colonial Pipeline update on timing of flows.

Colonial Pipeline expects every US southeast and Atlantic coast market it serves to receive fuel today after a nearly week-long shutdown of the system supplying almost half of the region's fuel demand.

Product delivery was already underway across the bulk of the 5,500-mile (8,851km) system moving fuels from the US Gulf coast through the southeast into the New York Harbor market, the company said today. Service would resume by noon ET to final markets at Birmingham, Alabama, and an area between Greensboro, North Carolina, and Dorsey, Maryland.

"By mid-day today, we project that each market we service will be receiving product from our system," Colonial said.

Emergency waterborne fuel deliveries and the slowly restarting pipeline network began refilling areas hammered by panic-buying yesterday. US regulators last night approved waivers of the Jones Act to allow gasoline and jet fuel deliveries from internationally-flagged vessels moving between US ports. The movements will speed deliveries of fuel to regions drained by the shutdown of the 2.5mn b/d pipeline network that started late last week.

The company began restarting more segments of that network at 5pm ET yesterday, restoring fuel flows from the US Gulf coast through the southeast and into the New York Harbor market.

Pipeline restart efforts "went well overnight" US energy secretary Jennifer Granholm said in a tweet this morning.

"This should mean things will return to normal by the end of the weekend," Granholm said.

Operators shut the pipeline network on 7 May to stop a ransomware infection from spreading to critical pipeline systems. Colonial moves fuel from suppliers in Texas, Louisiana and Mississippi through a 5,500-mile (8,851km) system.

Most of Florida receives waterborne fuel supplies. But southeastern states have fewer supply alternatives to the pipeline network. Though federal data showed fairly average fuel inventories for the area heading into the shutdown, the outage sparked panic buying, quickly draining retailers across the region.

The Jones Act requires US-flagged and crewed vessels move commodities including fuel between US ports. But low transportation fuel demand over the past year had idled a third of the fleet authorized to move gasoline, diesel and jet fuel. Last night's federal waiver will allow cheaper, more widely available internationally-flagged vessels to transport replacement supplies as the pipeline restores capacity.

By Elliott Blackburn