
Colonial Pipeline Co. defended a proposal for operational changes on its fuel network after objections from oil majors Exxon Mobil Corp. and Chevron Corp. and commodities trader Trafigura.
Colonial, which operates the largest gasoline pipeline in the US, said the changes “will enhance pipeline integrity and reliability and create more capacity for shippers” in a Monday filing with the US Federal Energy Regulatory Commission.
According to the filing, the proposed changes would mitigate risks associated with “pressure cycling,” which occurs when changes in internal pressure lead to stress in the pipe wall.
By transporting fewer products on the pipeline route, among other changes, “Colonial will experience fewer segment slowdowns and shutdowns (and the associated restarts) that more frequently arise when transporting multiple products in the same cycle,” the company said in the filing.
Trafigura, Exxon Mobil, Chevron and several other refiners previously filed motions asking the regulator to block Colonial’s proposed changes. Among the potential changes are halting the transport of volatile grade five gasoline on the maxed-out pipeline and boosting capacity by several thousand barrels a day.
Shippers on the system, which transports about 2.5 million barrels of fuel a day from the refinery belt of Texas and Louisiana to demand centers in the East Coast, say the changes will contribute to operational hurdles and higher costs.
Large swaths of the East Coast, where several refineries have shuttered in recent years, depend on Colonial’s pipeline to meet fuel demand, giving it an outsized effect on the domestic fuel market. If approved, the changes would likely take effect in September.
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