Two shippers to use waiver to ship fuel to Northeast: source

WASHINGTON Mon Nov 5, 2012 5:19pm EST

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WASHINGTON (Reuters) - Two companies have told the United States they intend to take advantage of a waiver allowing foreign-flagged ships to take oil products and additives from the U.S. Gulf to the Northeast to help relieve a fuel crunch after Hurricane Sandy, a government source said.

The Department of Homeland Security issued a rare blanket waiver of the 1920 Jones Act on Friday. At the time, only one company had indicated it wanted to ship fuel to the Northeast on a foreign ship.

"As of today, two companies have notified MARAD of their intent to use the waiver to transport petroleum products and fuel additives from the Gulf to the Northeast to ensure it has the fuel needed to proceed with recovery efforts," the source said. The Department of Transportation's Maritime Administration is also known as MARAD.

The number of shippers could rise as companies do not have to tell the government they intend to ship oil to the Northeast until 24 hours after loading in the Gulf of Mexico, the source said.

The waiver allows foreign-flagged ships to load oil products from the Gulf of Mexico until November 13 and deliver it to ports in the Northeast by November 20.

The source, who would only talk on the condition of anonymity, would not say which companies intended to use the waiver.

The Jones Act, part of the 1920 Merchant Marine Act, was created to support domestic jobs in the shipping industry. It requires goods moved between U.S. ports to be carried by ships built domestically and staffed by U.S. crews.

(Reporting by Timothy Gardner; Editing by Gary Hill, Bernard Orr and Phil Berlowitz)

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