Colonial tries again on shipper history transfers
OREANDA-NEWS. Colonial Pipeline is taking another stab at controlling shipping history transfers, an element to the line space trade that has developed on its chronically allocated mainlines that move US Gulf coast gasoline and distillates to the east coast.
Colonial's filing last week explained its rationale in more detail as it sought to comply with a Federal Energy Regulatory Commission (FERC) request to modify a proposed tariff from last year that would have banned the way many transfers occur on the 2.4mn b/d system.
The proposed tariff in November irked some shippers because it prohibited transfers of shipper history except in the sale of all of a company's business. FERC held the proposal in abeyance until 4 July while it tries to referee the matter.
The new filing allows the sale "or assignment" of all of a company's business or a "significant portion … defined as a component of the business that is associated with history of no less than 15,000 bl/cycle." New shippers have complained about lowering batch volumes from 25,000 bl/cycle, which they say is more typical of US Gulf coast volumes, but Colonial has countered that refiners will adjust.
The new language also allows history transfers between affiliates only in connection with the consolidation of "some or all of the shipper codes into one shipper code," and it drops language that would have blocked affiliated shippers from leveraging combined histories for access.
The revision also softened a section absolving Colonial of liability by adding exceptions of "gross negligence, bad faith or willful misconduct."
FERC hosted a technical conference earlier this month on the tariff proposal, during which agency staff pressed the pipeline company to explain why it has not moved to expand capacity when it has run essentially full since 2012. Colonial said it has ruled out near-term expansion.
The agency has given shippers until 8 April to make initial responses to the new filing and until 22 April to file full formal responses. Shippers at the technical conference said they believed line space trade would continue amid restrictions on shipper history transfers.
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