Colonial Shuts Key Fuel Line to New York Harbor After Spill
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Colonial Pipeline Co. halted operations on a critical conduit that supplies fuel to the U.S. Northeast, the latest disruption to energy flows following an outage on the Keystone oil pipeline in December.
Some product was released at Colonial’s Witt delivery station near Danville, Va., prompting the shutdown of its Line 3 Jan. 3, spokeswoman Meredith Stone said in an email. The company is planning a restart at around 12 p.m. ET on Jan. 7, Stone said.
Colonial’s Line 3 transports refined products such as gasoline, diesel and jet fuel to the New York Harbor market from Greensboro, N.C., and is part of a broader system that supplies fuels to the eastern U.S. from refineries on the Gulf Coast.
The incident follows the outage to TC Energy Corp.’s Keystone pipeline after the biggest onshore oil spill since 2010. The conduit, which can deliver as much as 600,000 barrels a day of Canadian crude into the U.S. Midwest, only fully returned to service in late December.
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The Colonial shutdown has so far had limited impact on the New York Harbor market — gasoline even softened slightly against Nymex futures on the morning of Jan. 5. Gulf Coast gasoline fell by a couple cents against futures following the outage. New York Harbor’s gasoline supplies have been building over the past few weeks during a seasonal demand lull.
New York Harbor is a major import hub receiving fuel from Canada, Europe, India and South America, making it better insulated from Colonial pipeline disruptions than the Southeast. A prolonged outage of Line 3 could strain supplies on the East Coast, though, while flooding the Gulf Coast with fuel.
Colonial didn’t provide the cause or volume of the leak, although it said the impact appears to have been contained within its property.
— With assistance from Joe Aboussleman.
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