Exxon challenges Colonial Pipeline on proposed changes to fuel shipping terms
By Nicole Jao and Shariq Khan
NEW YORK (Reuters) - ExxonMobil filed a protest notice on Wednesday asking regulators to block Colonial Pipeline's proposed changes in fuel shipping terms, citing potential harm to shippers and consumers, a filing showed.
The Colonial Pipeline is a key artery for shipping fuel from the U.S. Gulf Coast to the East Coast, where refining capacity has shrunk and pipeline shipments are the most cost-effective way to meet regional demand.
Earlier this month, Colonial sought approval from the Federal Energy Regulatory Commission (FERC) to stop shipping different gasoline grades at the same time, and to eliminate shipments of so-called Grade 5 gasoline.
The pipeline operator said the changes would streamline its operations and minimize slowdowns.
"Colonial's proposed tariff changes will severely disrupt the efficiency of the gasoline supply chain," Exxon said in the protest notice.
A Colonial spokesperson said the company would respond to Exxon's filing shortly.
If the changes are approved, shippers will not be allowed to ship gasoline products with higher Reid Vapor Pressure, or RVP, but Colonial can deliver the products to downstream markets.
Exxon said the proposed changes benefit Colonial but harm the margins for everyone else involved in the supply chain.
Several gasoline marketers who spoke to Reuters on condition of anonymity earlier this month said they were exploring options for court challenges if Colonial follows through with the changes, Reuters reported.
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