Colonial Pipeline’s main US gasoline artery likely shut until Friday

By Shariq Khan

NEW YORK (Reuters) – Colonial Pipeline’s main U.S. gasoline artery is expected to remain shut through Friday as the company continues to search for the source of a suspected leak in Paulding County, Georgia, the company said in a statement on Wednesday.

Line 1, one of two mainlines on the more than 5,500-mile Colonial system, was shut on Monday night after Colonial received reports of a gasoline release. The pipeline moves gasoline from Texas to North Carolina and was earlier expected to resume service on Tuesday night, according to market sources.

“Colonial continues on-site work to identify the source of the suspected release on our gasoline pipeline,” a Colonial spokesperson said on Wednesday. “At this time, we estimate that Line 1 will remain down through Friday,” they added.

That timeline puts Line 1’s outage on par with a high-profile 2021 cyberattack that forced the entire Colonial network to shut down. During that attack, the company’s mainlines were out for about a week, leaving gas stations empty and lifting fuel prices in multiple cities along the East Coast.

Shippers will be informed if there are any changes to the timeline for Line 1’s restart, the Colonial spokesperson said, adding that the company is working with its customers to provide limited gasoline deliveries on other parts of its pipeline network.

Despite the lengthy outage, fuel prices have remained stable as gasoline demand has been hit by extremely cold weather and rising inventories have provided a buffer, according to fuel analysts and distributors.

“While this outage is significant, fuel markets remain stable for now, with sufficient inventories to manage a short-term disruption,” U.S. fuel distributor Mansfield Energy said in a note to clients.

Line 1 delivers 1.5 million barrels of gasoline each day from Houston, Texas, to storage tanks in Greensboro, North Carolina, from where the motor fuel is distributed locally or shipped to other markets all the way up to the New York Harbor.

It is almost always chock-full of gasoline, supplying about half of the East Coast’s daily demand for the motor fuel, making it one of the most crucial parts of the domestic U.S. gasoline supply chain.

As of Jan. 10, the U.S. East Coast had 63.4 million barrels of gasoline in storage, equating to more than 20 days of supply, according to Reuters calculations based on government data.

The outage is not currently expected to cause a large jump in retail gasoline prices, GasBuddy analyst Patrick De Haan said. Prices in Atlanta, Georgia, were stable despite the outage, he added.

However, panic buying from consumers could create challenges, De Haan warned. If Line 1 does not restart by Friday and the outage extends into the holiday weekend, that could be a major problem, he added.