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UPDATE 2-Colonial Pipeline shuts small gasoline line to Nashville after leak
January 9, 2017 / 5:38 PM / 8 months ago

UPDATE 2-Colonial Pipeline shuts small gasoline line to Nashville after leak

(Adds potential market impact, analyst comment)

NEW YORK, Jan 9 (Reuters) - Colonial Pipeline Co’s gasoline line between Atlanta and Nashville, Tennessee, remained shut on Monday as the company looked for the source of a very small leak in Chattanooga, a spokesman for the Chattanooga Fire Department said on Monday.

Colonial Pipeline reported to the U.S. National Response Center that the leak released about 15 barrels of gasoline, a spokeswoman said in an email.

The line, known as Line 19, was shut on Saturday after the smell of gasoline was reported to the fire department in Chattanooga, Tennessee, Colonial Pipeline said in a notice to shippers on Sunday. It has since restarted Line 20, a distillates line, which was also shut as a precaution.

The leak released gasoline into Shoal Creek, which empties into the Tennessee River, a Chattanooga Fire Department spokesman said. There was no danger to the public, he said.

Colonial Pipeline, the largest refined products system in the United States, can carry more than 3 million barrels of gasoline, diesel and jet fuel between the U.S. Gulf Coast and the New York Harbor area.

Line 19 delivers gasoline into the Nashville market.

Traders said the shutdown could be bearish for the East Coast market if more barrels get shipped on alternate lines, such as Line 3, to find a home for the displaced barrels.

The issue was for the time confined to Nashville, and alternative supplies for gasoline stations could come from Chattanooga, or two other Tennessee cities, Knoxville or Memphis, according to Patrick DeHaan, a petroleum analyst at Gasbuddy.com.

“I would say by midweek if there’s no restart (of Line 19), then this could pose pretty big challenges,” DeHaan said.

A leak on Colonial’s main gasoline line, Line 1, and the subsequent shutdown in Alabama in September resulted in a squeeze in supplies across the U.S. Southeast, including Georgia, Virginia, South Carolina, North Carolina, Alabama and Tennessee.

Average gasoline prices in Nashville remained largely unchanged on Monday at $2.177 a gallon compared with Sunday, according to motorist advocacy group AAA. (Reporting by Devika Krishna Kumar in New York; Editing by Bernadette Baum)

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