Tuesday, November 1, 2016

Colonial Shuts Gasoline, Distillate Lines After Explosion, Fire In Alabama

By Liz Hampton and Devika Krishna Kumar
Reuters
November 1, 2016

Colonial Pipeline Co [COLPI.UL] shut down its main gasoline and distillates pipelines on Monday after an explosion and fire in Shelby, Alabama, that injured seven workers - the second time in two months it had to close the crucial supply line to the U.S. East Coast.

A nine-man crew was conducting work on the Colonial pipeline system at the time of the explosion, Alabama Governor Robert Bentley told a briefing. Seven of the crew members were injured, with two evacuated by air.

Four victims of the blast were taken to the UAB hospital in Birmingham, Alabama, hospital spokesman Adam Pope said.

A segment of pipeline was undergoing maintenance on Monday afternoon when it exploded. The fire had been contained as of around 9 p.m. (0100 GMT on Tuesday), according to local media reports.

It was not clear whether the explosion happened on the gasoline or the distillates pipeline, the governor said in the briefing.

Colonial said company personnel and emergency crews were responding to the incident. The U.S. Pipeline and Hazardous Materials Safety Administration, or PHMSA, said it had personnel on the way to the site.

Bentley's office said on Twitter the site was about a mile west of a massive leak last month that closed the gasoline pipeline for over 12 days. A 3-mile (4.8-km) area around the site had been evacuated, the governor said.

A temporary flight restriction is in effect in the area around the pipeline explosion, the Alabama Emergency Management Agency said on Twitter.

Colonial, the biggest refined products system in the United States, is responsible for supplying about one-third of the 3.2 million barrels per day of gasoline consumed on the East Coast, according to U.S. Energy Department data.

Colonial was working to restart a section of pipeline damaged after its biggest leak of gasoline in nearly two decades on Sept. 9, which released as much as 8,000 barrels (336,000 gallons) of gasoline in Shelby County. The restart was planned for mid-November after removal of a bypass line installed after the September leak.

The pipeline was out of service for more than 12 days following the leak and its closure drove up gasoline prices at the pump in the U.S. Southeast and on futures markets.

On Monday, U.S. gasoline futures RBc1 jumped as much as 13 percent to $1.6351 a gallon, their highest since early June, following news of the explosion. Futures pared gains thereafter, falling by about 6 cents, or 3.7 percent.

The 5,500-mile (8,850-km) Colonial is the largest U.S. refined products pipeline system and transports gasoline, diesel and jet fuel from the U.S. Gulf Coast to the New York Harbor area. The pipelines that shut run from Houston to Greensboro, North Carolina.

It has already had five spills reported in Alabama in 2016, including the one in September, according to PHMSA data.

Pipeline safety has come under increased scrutiny in recent months following a dispute over Energy Transfer Partners' (ETP.N) 1,100-mile (1,770-km) North Dakota Access Pipeline.

The U.S. government halted construction on a segment of that pipeline in early September following protests from Native Americans who said the pipeline could desecrate sacred grounds and that spills could contaminate drinking water.


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