Colonial Outlines Northeast Strategy, Growth Plans For Southern System

ALPHARETTA, Ga. — Colonial Pipeline today outlined a strategy for expanding service in the Northeast with a series of improvements potentially providing an additional 100,000 to 600,000 barrels per day of capacity.

The improvements to Colonial are alongside steps to further harden the Northeast infrastructure against another ​“superstorm” with its own set of portable generators capable of replacing the loss of commercial power during an emergency.

“The plans, which we intend to more clearly define by mid-2013, are meant to respond to our customers’ request for additional capacity, and to maintain our reliability while keeping the cost of delivery competitive in the marketplace,” said Colonial President and CEO Tim Felt.

The options being examined include further expansion of Line 3, from Greensboro, N.C., to Linden, N.J., by an additional 100,000 barrels per day (BPD) capacity. This line has been expanded twice since 2011, with pump upgrades and other improvements yielding an additional 160,000 BPD.

Evaluation of this expansion is expected to be completed first, before other enhancements are decided. These include the potential for extending Line 4, the line from Greensboro to central Maryland, through to southern New Jersey where it could serve the Philadelphia and Linden area markets.

If accomplished, these projects would clear the way for additional capacity expansions on the southern mainlines, Lines 1 and 2. An earlier project to add an additional pipeline between Baton Rouge and Atlanta was postponed indefinitely, said Felt, but is being re-evaluated as one option to address customer requests for more capacity across the Colonial system.

“This concept of growing Colonial is fully supported by Colonial’s owners and is in direct response to customers who demand more capacity on Colonial,” Felt said. ​“We have many permitting and other hurdles to cross, but we are convinced this is the kind of infrastructure our customers want and our country needs.”

Colonial has designated teams focusing on these customer improvements while other teams are dedicated to the maintenance and system integrity work necessary to safe, reliable and environmentally responsible operations. Colonial’s system integrity spending will top $100 million in 2013, a new milestone for the company.

To further improve reliability, Colonial is exploring the purchase of additional generators as a course of emergency backup power. A ​“lessons learned” from Hurricane Katrina in 2005, Colonial’s own generators were trucked in after Hurricane Sandy passed and had Colonial delivering fuel within two days.

Work slated to begin in 2013 includes the upgrading of delivery lines from Colonial’s Linden and Woodbury tank farms in the northern and southern end of the state, respectively. In some cases, these enhancements make delivery lines bi-directional, further improving the area’s infrastructure. These plans are part of Colonial’s Northeast master plan, which includes better connections to rail, barge, trucking and shipping, as well as additional storage.

Colonial has begun consistent service for its customers to serve the Philadelphia airport through third party terminals and continues to supply jet fuel through Linden that ultimately is consumed at New York Metropolitan area airports. However, Colonial continues to seek opportunities to improve the delivery logistics to these airports and is discussing opportunities to improve this service with potential customers.

On tap for Colonial’s service in the South and Gulf Coast are the completion of the Line 1 gasoline expansion (100,000 bpd) in Q2 2013 and the introduction of bio-diesel shipments in Georgia and renewable fuel deliveries system-wide. Colonial also has applied for air permits to construct more than 4 million additional barrels of tank capacity system-wide, with approximately 1.7 million of that currently under construction in the Gulf Coast where Colonial is actively seeking opportunities to support growing exports and feedstock and component movements.

Colonial Pipeline is a 5,500-mile system of pipelines originating in Houston, Texas, and terminating in Linden, N.J. on the New York harbor. Colonial safely transports approximately 100 million gallons a day. The vast majority of Colonial’s shipments are refined petroleum products such as gasoline, diesel fuel, jet fuel, home heating oil and fuel for the U.S. military. To learn more visit www.colpipe.com.