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Colonial Pipeline responds in response to protests regarding proposed changes to gasoline shipment

Colonial Pipeline, on Monday, asked the U.S. Federal Energy Regulatory Commission (FERC) to reject shippers’ protests about proposed changes in how it moves gas. Colonial argued that the modifications were in line with the industry's practices and within Colonial’s authority.

Exxon Mobil and Chevron Corp, as well as BP Plc and other oil majors, filed protests last week with FERC after Colonial requested the regulator's permission to stop shipping multiple grades of gasoline simultaneously and to reduce its total number of grades on the pipeline.

Colonial, the system that transports gasoline along the East Coast of the United States from the U.S. Gulf Coast refinery hub, has cited the potential harm caused to consumers and shippers in an effort to increase profits.

Colonial dismissed the arguments and said they were driven by protesting shippers who focused on their own economy. It claimed that the proposed changes would allow it to ship an additional 10,000 barrels of gasoline per day on its main pipeline which is almost always full. This will benefit both shippers as well as consumers.

The company said that fewer grades of oil and a reduction in overlapping shipments would reduce the number of slowdowns and shut downs along its pipeline segments. This will also reduce the stress on the system, and the likelihood of mechanical failure.

Colonial's filing stated that the changes it seeks to make, which are within its legal authority and in line with industry practices, will improve pipeline reliability and integrity, and increase capacity for shippers.

The operator of the pipeline agreed with the argument made by the shippers that the changes would allow them to expand their own fuel-blending operations. It said, however, that FERC had made it clear that blending was not within the regulator's jurisdiction. (Reporting and editing by Nia William in New York, Shariq Khan is reporting from New York)

(source: Reuters)