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Bloomberg
The largest US gasoline pipeline returned to service by the end of the day Wednesday, easing almost two weeks of curtailed shipments that drove up pump prices and caused hundreds of stations to run out of fuel in the East and Southeast.
Once Colonial Pipeline Co. restarts its main line, many shipments will be rerouted to southern locations in need of supply, which could result in temporary shortages, the company said in a notice to shippers. Colonial has tied in a bypass connector that will move fuel around a segment of its Line 1 that sprung a leak on Sept. 9. Hydrostatic testing on the newly built line was completed early Wednesday.
“Colonial is attempting to resume gasoline operations to all locations as soon as possible and to equitably distribute supply,†the company said in the notice. The shutdown of the 1.3 million-barrel-a-day gasoline line choked off key supplies to the East Coast from the Gulf Coast. Inventories in the East dropped 8.48 million barrels last week, the Energy Information Agency reported Wednesday, the biggest decline since the government began publishing weekly data in 1990.
Meanwhile supplies in the Gulf Coast region soared to 83.7 million barrels.
“While one area has been starved, the other area is stranded,†Matt Smith, ClipperData LLC’s director of commodity research, said in a phone call from New York.
Colonial, owned by a group that includes Koch Capital Investments Co. and a unit of Royal Dutch Shell Plc, said it’s “attempting to resume gasoline operations to all locations as soon as possible and to
equitably distribute supply,†according to a notice sent to
shippers today.
A stretch of the pipeline was shut after leaking up to 8,000 barrels of gasoline south of Birmingham, Alabama. The federal government on Tuesday approved the use of a bypass pipeline as a “temporary measure” to restore normal shipments. Movements through the segment affected by the spill are still off-limits until a US pipeline safety agency agrees it’s safe to use.