Colonial Pipeline to reopen segment to transport distillates, gasoline

HOUSTON (Reuters) - Colonial Pipeline Co on Monday will restart Texas portions of its main distillate and gasoline lines shut by Hurricane Harvey, the biggest U.S. fuels system operator said on Sunday.

The main distillate line between Houston and Hebert, Texas, is expected to restart by Monday, and the gasoline line between those two points is expected to be in service by Tuesday. The company had initially aimed to restart both its lines by Sunday.

Colonial, which hauls more than 3 million barrels per day of fuel from the U.S. refining hub in the Gulf Coast to the populous Northeast, said it was forced to shut that segment of its lines last week because of flooding and a lack of supplies due to refinery closures. Hebert is southeast of Beaumont, Texas, one of the coastal communities hard hit by flooding.

The pipeline system includes 15 storage locations and connects to more than 260 fuel terminals, serving seven airports and other facilities.

At least 4 million barrels per day of refining capacity had been knocked offline as Harvey’s heavy rains hammered Texas and Louisiana’s oil and natural gas industry, dropping as much as 50 inches (1.3 m) over the Texas coast in five days.

Colonial’s system east of Lake Charles, Louisiana, continues to operate, but the company has warned that deliveries would be affected by reduced supplies.

About half of the refineries that connect to Colonial’s pipelines are between Houston and Lake Charles, Colonial has said.

Average retail U.S. gasoline prices rose on Sunday by a further 1 percent to $2.621 a gallon, even as several oil refineries began to recover operations after being knocked out by Harvey, according to motorists advocacy group AAA.

Reporting by Devika Krishna Kumar; Writing by Marianna Parraga; Editing by Lisa Von Ahn and Peter Cooney