Sticker shock seen for U.S. motorists after key pipeline break

Sat Sep 17, 2016 9:16pm EDT
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(This version of the story was corrected to remove reference to Colonial hoping to restart pipeline by Thursday in paragraph 3)

By Devika Krishna Kumar

NEW YORK (Reuters) - Colonial Pipeline Co aims to restart a key U.S. gasoline line by Thursday after delays to repair a leak boosted fuel prices, but analysts expect some motorists to feel the sticker shock for longer.

Colonial, the largest U.S. refined products pipeline system, last Friday shut its main gasoline and distillate lines that run from the Gulf Coast refining hub to the East Coast, after the leak was discovered in Shelby County, Alabama.

Gasoline futures RBc1 have soared 9 percent in the past week mainly on the closure while prices at the pump in certain states started to spike on Friday due to the ongoing partial shutdown of the vital artery that flows 1.2 million barrels per day of gasoline and other products.

The company has restarted operations at some parts of its gasoline pipeline at reduced rates, and is also pumping fuel on its distillate line, which has been completely restarted.

The restart of the gasoline line was pushed to next week because of gasoline vapors at the site, the company said. Colonial said it would begin excavation operations on Friday afternoon to repair the affected section.

Colonial said it was also considering constructing a temporary segment of pipeline around the leak site.

On Friday, the company increased its estimate of the volume of the spill to a range of 6,000-8,000 barrels from a previous estimate of 6,000 barrels.   Continued...

A car is filled with gasoline at a gas station pump in Carlsbad, California August 4, 2015.  REUTERS/Mike Blake