Southeast US terminals scramble ahead of hurricane

OREANDA-NEWS. October 06, 2016. Southeastern US fuel marketers scrambled to place supplies today as Hurricane Matthew approached the Atlantic coast.

Hurricane Matthew could scrape Florida's east coast late this week before traveling up to the Carolinas. The storm was 70 miles (115km) south of the Bahamas at 2pm ET, traveling toward the islands with winds up to 115 mph (185 kph) after pummeling Haiti and Cuba.

US states in the path of the storm reported adequate fuel stocks, although panic buying and evacuation preparations complicated delivering fuel to some areas. Reversing highway lanes to move higher volumes of travelers out of the area challenged fuel deliveries to the South Carolina coast, said Mark Fields, executive director of the South Carolina Petroleum Marketers Association.

"Based on what I'm hearing this morning from some of my guys that supply those areas, things are tight but there's not a supply shortage or anything like that," Fields said. "It's just really, logistically, getting stuff from the terminal to the tank."

Florida, which largely depends on ocean-going tankers for fuel deliveries, had eight days of supply even if it shut its ports, governor Rick Scott's office said today. The US Coast Guard closed Florida's Port of Miami and Port Everglades, a large port on the state's east coast, to incoming vessels and required commercial vessels to leave by 4am ET today. Fuel racks continued to distribute gasoline already unloaded at the ports into the state.

Shipbrokers expected delays for tankers traveling down the Atlantic coast on their way to the US Gulf coast, but the delays had not yet affected freight rates. Some vessels on their way to the Gulf have been diverted toward Europe instead.

North and South Carolina could rely on pipeline supplies. Colonial Pipeline, which supplies products from Texas and Louisiana refiners through the southeast and into the New York Harbor market, said it was monitoring the storm.

A September outage on its gasoline-bearing 1.3mn b/d Line 1 connecting US Gulf coast refiners to terminals throughout the southeast contributed to an 8.5mn bl draw on US Atlantic coast gasoline inventories in mid-September.

But inventories increased by more than 3.5mn bl last week after pipeline flows resumed, providing some reserves for any storm disruptions. Stockpiles on the Atlantic coast were 9.4pc higher than the ten-year average for the week.

"Everyone said they were getting pretty much caught up last week, so I've got nothing to indicate that there's any concern about supply down east, or supply coming in, right now," said Gary Harris, executive director of the North Carolina Petroleum and Convenience Marketers association.

Marketers will also need to ensure gasoline tanks are mostly full before storm floodwaters arrive. Heavy flooding during Hurricane Floyd, which followed Matthew's forecasted path into the Carolinas in 1999, carried lighter storage tanks away. Hurricane Sandy wrought similar damage on New York Harbor storage in 2012.

"After Floyd, I think a lot of people learned a hard lesson on that one," Harris said.

The hurricane had already forced shutdowns for Caribbean terminals. Buckeye Pipeline suspended marine operations at its 26.2mn bl Bahamas Hub crude and products terminal as the storm approached the island. The terminal, one of the Caribbean's largest, was preparing to take all dock transfer pipelines out of service, the company said today.

"Operations will resume as soon as weather conditions are safe to do so," the company said.

Statoil was evacuating non-essential workers from its Bahamas operations, including the South Riding Point storage and transhipment terminal, the company said yesterday.