Colonial Pipeline resumes scheduling changes

Colonial Pipeline is letting shippers change where they send their refined products shipments on the system connecting US Gulf coast refineries with the Atlantic coast, as the company's nominations system has been restored following a cyberattack.

When Colonial resumed service last week it notified shippers it would not allow them to change destinations for barrels sent along the pipeline because the systems used to schedule such movements were still offline. This left shippers with no way to redirect barrels to southeastern markets drained by panic buying.

Over the weekend, Colonial notified shippers that they can now make nomination changes for all lines on the system.

"We understand shippers will make significant changes to their current nominations following the recent downtime," the company wrote in a notice to shippers yesterday.

The normal nomination and scheduling process as outlined in the shipper manual will begin tomorrow, the company said.

A ransomware attack on 7 May led the Colonial Pipeline to shut its 5,500-mile system transporting gasoline, diesel and jet fuel from the US Gulf coast to as far as New York Harbor. A phased restart began after six days, on 12 May, and a more complete restart began 13 May.

While the shutdown created concerns about fuel shortages in a number of regions, it did not trigger the sharp spot market reactions seen in previous outages, in part because of global oversupply and recent changes to the US Atlantic coast refined products market.

Unlike a 2016 incident, where Colonial's gasoline line was shut down for six days because of a leak, spot prices did not catapult to multi-month highs in New York Harbor, nor did they plummet in the US Gulf coast following this month's incident.

Instead, Buckeye pipeline CBOB prices in New York Harbor rose by less than 3¢/USG before dropping by more than 7¢/USG upon the pipeline's restart last week. And in the Gulf coast, conventional gasoline prices saw relatively small daily movements that were mostly within the five-day moving average since the outage. Prices even rose in the days following the outage, as gains in Nymex futures more than offset the drop in regional physical differentials.