US issues second Jones Act shipping waiver: Update

Federal officials eased legal requirements for shipping between US ports for a second company to speed fuel resupply as the Colonial Pipeline network recovers.

The US Department of Homeland Security late yesterday waived Jones Act requirements for a second company, allowing it to use non-US-flagged and crewed vessels to move fuel from the US Gulf coast to the Atlantic coast.

This second waiver was issued to US refiner Citgo, according to a shipping source. Earlier in the week, the company chartered the Malta-flagged Forres Park, a roughly 325,000 bl-capacity medium range tanker, to load in the US Gulf coast with an option for US Atlantic coast discharge. Vessel tracking shows loading operations are underway for the tanker at Lake Charles, Louisiana, where Citgo operates a 425,000 b/d refinery. Citgo could not be reached for comment.

The US previously issued Valero a waiver for a fuel shipment.

The US did not name either company receiving waivers.

Federal and state regulators have eased environmental and transportation requirements to speed the resupply of fuel across the US southeast and Atlantic coast. A nearly week-long shutdown of the Colonial Pipeline network cut off gasoline, diesel and jet fuel across a system feeding nearly half of the Atlantic coast supply.

The 5,500-mile (8,850km) Colonial network connects US Gulf coast refiners to terminals across the region and the New York Harbor market. The system can move more than 2.5mn b/d of fuel, though over the past year it has run well below capacity.

Colonial shut the system on 7 May following a ransomware infection, and restarted operations on 12 May. The operator has resumed deliveries without its ticketing, nomination or inventory systems, which it expects to restore by the end of the week.

By Elliott Blackburn & Nicholas Watt