01.11.2016, 16:49
Deadly Colonial pipeline blast causes gasoline spike
OREANDA-NEWS. US gasoline futures soared late yesterday in the wake of a massive, fatal fire that shut the largest gasoline and diesel pipeline through the southeast US for the second time in seven weeks.
Colonial Pipeline's Lines 1 and 2 remained shut today following a 4pm ET explosion and fire triggered by contractors operating digging machinery in Shelby county, Alabama. The blaze erupted one mile west of the site of a 9 September leak that for 13 days shut the 1.3mn b/d gasoline-bearing Line 1 connecting refineries near Houston, Texas, to the company's 5,500-mile (8,851km) pipeline network.
One contractor was killed and five others hospitalized, according to the company.
Fuel moves across Line 1 and the distillates-bearing twin, Line 2 to terminals throughout Alabama, Georgia, Tennessee, South Carolina and North Carolina. Products move from Greensboro, North Carolina, on to the New York Harbor market.
Nymex RBOB futures prices soared higher by as much as 13pc, to $1.6351/USG, before falling to $1.5774/USG ahead of today's open.
Towering flames burned well into the night in rural Alabama southwest of Birmingham. Crews built an eight-foot-tall, 80-foot long dirt dam to contain the ignited fuel. State forestry officials suspected debris from the blast ignited two forest fires totaling 17 acres in addition to the blast site, and emergency officials evacuated a three-mile area around the blaze. The main fire was too dangerous for crews to approach immediately following the blast, and officials chose to wait for fuel in the pipeline to burn, according to the governor's office. The office later estimated 32 acres had burned.
Kinder Morgan's Plantation pipeline, which moves fuel along a similar path into Virginia, was unaffected by the accident, the company said. Operations were "a safe distance" from the fire site, according to the company.
This has been Colonial's worst year for pipeline accidents requiring a shutdown since at least 2002, based on federal data. The 9 September release, discovered by a state mining inspector, leaked an estimated 7,400 bl and halted fuel deliveries to terminals throughout the southeast until Colonial completed a 500-foot bypass capable of moving the same volume of fuel on 22 September.
The surprise outage drained terminals in those states, leading to local retail shortages and complicating US Gulf coast refining operations. US Atlantic coast gasoline inventories plummeted by 8mn bl following the break.
Marathon Petroleum reported unspecified increased spending on trucking and used Jones Act shipping to supply customers during the outage. The September shutdown also cut runs at Alon USA's 83,000 b/d refinery in Krotz Springs, Louisiana. The company reduced fluid catalytic cracking (FCC) rates and shipped gasoline by barge during the shutdown, impairing margins during the quarter, chief executive Paul Eisman said last week.
Colonial Pipeline's Lines 1 and 2 remained shut today following a 4pm ET explosion and fire triggered by contractors operating digging machinery in Shelby county, Alabama. The blaze erupted one mile west of the site of a 9 September leak that for 13 days shut the 1.3mn b/d gasoline-bearing Line 1 connecting refineries near Houston, Texas, to the company's 5,500-mile (8,851km) pipeline network.
One contractor was killed and five others hospitalized, according to the company.
Fuel moves across Line 1 and the distillates-bearing twin, Line 2 to terminals throughout Alabama, Georgia, Tennessee, South Carolina and North Carolina. Products move from Greensboro, North Carolina, on to the New York Harbor market.
Nymex RBOB futures prices soared higher by as much as 13pc, to $1.6351/USG, before falling to $1.5774/USG ahead of today's open.
Towering flames burned well into the night in rural Alabama southwest of Birmingham. Crews built an eight-foot-tall, 80-foot long dirt dam to contain the ignited fuel. State forestry officials suspected debris from the blast ignited two forest fires totaling 17 acres in addition to the blast site, and emergency officials evacuated a three-mile area around the blaze. The main fire was too dangerous for crews to approach immediately following the blast, and officials chose to wait for fuel in the pipeline to burn, according to the governor's office. The office later estimated 32 acres had burned.
Kinder Morgan's Plantation pipeline, which moves fuel along a similar path into Virginia, was unaffected by the accident, the company said. Operations were "a safe distance" from the fire site, according to the company.
This has been Colonial's worst year for pipeline accidents requiring a shutdown since at least 2002, based on federal data. The 9 September release, discovered by a state mining inspector, leaked an estimated 7,400 bl and halted fuel deliveries to terminals throughout the southeast until Colonial completed a 500-foot bypass capable of moving the same volume of fuel on 22 September.
The surprise outage drained terminals in those states, leading to local retail shortages and complicating US Gulf coast refining operations. US Atlantic coast gasoline inventories plummeted by 8mn bl following the break.
Marathon Petroleum reported unspecified increased spending on trucking and used Jones Act shipping to supply customers during the outage. The September shutdown also cut runs at Alon USA's 83,000 b/d refinery in Krotz Springs, Louisiana. The company reduced fluid catalytic cracking (FCC) rates and shipped gasoline by barge during the shutdown, impairing margins during the quarter, chief executive Paul Eisman said last week.
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