* Colonial Pipeline: commercial power restored at Linden
* First oil tanker transits through Arthur Kill waterway
* Fuel shortages remain in New York and New Jersey
* Heating oil stocks low as cold storm approaches the region
By Selam Gebrekidan
NEW YORK, Nov 4 (Reuters) - The New York Harbor energy network was returning to normal on Sunday with mainline power restored nearly a week after Hurricane Sandy pummeled the eastern seaboard.
Yet damage to infrastructure near Linden, New Jersey, a major northeast fuel hub, kept a major refinery and some terminals shut, lending longer life to gasoline shortages that have persisted in the region.
Another looming concern was that heating oil supplies were dwindling with temperatures expected to dip to freezing in New York by Monday.
Commercial power was restored at Colonial Pipeline's key terminal in Linden and the company was delivering to seven terminals connected to the facility on Sunday. NuStar Energy LP, whose Linden terminal had sustained severe damages after Sandy, said it hoped to restore pipeline and barge deliveries "very soon."
Phillips 66's Bayway refinery in Linden was idle over the weekend after the company was forced to shut 238,000 barrel per day plant when the storm hit. Phillips 66 said it does not expect updates on operations until Monday morning.
In the New York Harbor, some of the four tankers carrying refined fuels and anchored offshore were transferring shipments to smaller barges for delivery, the U.S. Coast Guard said.
One of the tankers, Glory Express, became the first allowed into the Arthur Kill Waterway after Sandy struck. It was headed to Kinder Morgan's Carteret terminal in New Jersey on Sunday afternoon, Reuters shipping data showed.
Late on Saturday, Hess Corp said power was partly restored at its 70,000 bpd Port Reading, New Jersey, refinery, but it needs full power to complete a damage assessment. Hess said it could take several days before it could bring back utility systems necessary to consider restarting.
The outages hit the U.S. East Coast when gasoline and diesel stocks were hovering near all-time lows. Total East Coast gasoline inventories hit a record low for October in the first week of the month and barely recovered in the weeks since, according to U.S. Energy Department data. Similarly, East Coast distillate stocks were at a seven-year low three weeks ago.
In a briefing on Sunday, New York Governor Andrew Cuomo said the fuel shortage is lifting in New York but problems are likely to persist for "a number of days."
In New York, 27 percent of gasoline stations surveyed by the Energy Department's data arm were without fuel on Sunday, down from 38 percent on Saturday. This, along with the 30,000 gallons of gasoline distributed by the New York National Guard on Saturday, brought some relief to motorists troubled by the fuel outages.
By Sunday afternoon, 1.86 million homes and businesses were without power in states hit by the storm. Power was restored to nearly 78 percent of customers that were without electricity after Sandy.
New Jersey power provider PSE&G said it brought power back to 78 percent of gasoline stations in its service area.
"We have restored power to all of the refineries and pipeline suppliers that we are aware of," PSE&G President Ralph LaRossa said on a conference call.
However, there were still signs of the shortages that have gripped the region, causing miles-long lines for gasoline.
Fuel rationing based on license plate numbers in New Jersey, which was enacted by Governor Chris Christie, entered its second day. Only cars with even numbers could buy gasoline in the state on Sunday.
In Montclair, New Jersey, some stations ran out of fuel after pumping gasoline on Saturday for cars with odd-numbered plates. This left few stations with gasoline to serve motorists with even-numbered plates, who waited for hours on Sunday.
On the heating oil front, suppliers were optimistic there would soon be enough supplies, barring any transportation issues in the next few days.
Two terminals with heating oil supplies - one in the Bronx and one in Brooklyn -- were open for business on Sunday and some barges were expected to deliver heating oil to terminals operated by Bayside Fuel Oil Depot terminals in Red Hook, Brooklyn.
"If all goes smoothly we'll have enough for this week and into the next weekend," said John Maniscalco, head of New York Oil Heating Association.