QuikTrip: Gas supply cut in half by pipeline issue

Giant convenience store chain QuikTrip said it is getting only enough fuel to supply about half of its 200 stores across the Southeast, including dozens in metro Atlanta.

QuikTrip spokesman Mike Thornbrugh said the company is scrambling to line up barges, train cars and out-of-state trucking companies to bring in supplies of gasoline to its stores.

“Based on the low supplies, if you tried to deliver to every store, everyone would be out,” he said. Fortunately, so far, “there hasn’t been any panic buying” by motorists, he added.

QuikTrip, based in Tulsa, Okla., operates about 131 stores in metro Atlanta and the rest in metro Charlotte, N.C., and western South Carolina.

“More supply is working its way into metro Atlanta,” said Thornbrugh. But a big bottleneck, he said, is that truckers are having to wait five and six hours in line at pipeline terminals to pick up tank loads of gasoline.

“Right now we’re still operating at 50 percent capacity,” he said. “It’s going to take a while.”

Angela Holland, president of the Georgia Association of Convenience Stores, said store operators are doing “what they can” to minimize the disruptions. That includes working the phone lines to get alternate supplies of gasoline from the ports of Savannah and Jacksonville, Fla.

“There is fuel in the market,” she said. “We’re just suggesting that people purchase fuel as they normally do.”

The short supply at QuikTrip and other stores is an example of the fallout from the Alabama gasoline pipeline break that has disrupted supplies, sent prices sharply higher and caused spot outages.

The broken pipeline is operated by Colonial Pipeline of Alpharetta, one of two major pipeline operators based in Alpharetta.

Colonial and Plantation Pipeline run four pipelines up to 40 inches in diameter and thousands of miles long. Combined, they typically pump almost 140 million gallons of fuel a day through the region, most of it headed farther up the coastline to New York and Washington, D.C. from dozens of refineries along the Gulf Coast.

Normally, those parallel pipelines help insulate the Atlanta market from severe price spikes from pipeline leaks, refinery outages or other disruptions, according to industry experts.

But that insulation has grown a bit thin over the years as demand on the pipelines has grown, as anyone knows who has had to hunt for gasoline this week in Atlanta.

Monday, Colonial Pipeline continued to struggle to recover from a major gasoline leak on a 54-year-old section of one of its two trunk pipelines near Birmingham, Ala. The broken pipeline has reduced its capacity by half.

The company operates two major pipelines and several branch lines totaling about 5,500 miles. They supply roughly 105 million gallons a day of gasoline and other fuels to more than 50 million customers in the Southeast and along the East Coast.

Colonial typically pumps gasoline on one pipeline, and diesel, jet fuel and similar fuels on another pipeline. Monday, the company said it is re-routing gasoline to its other major pipeline while it works to by-pass the leak on its gasoline pipeline.

The bypass is expected to be completed this week, said Colonial spokesman Steve Baker. Over the weekend, he said, the company shipped a batch of gasoline on the other pipeline to metro Atlanta’s Doraville terminal, and has contingency plans to send more if needed.

Once the temporary bypass is completed, the repaired pipeline will “be able to operate at full rate,” said Baker. But “we’ve had an upset to the market so it’ll take a while” to return to normal, he said.

Colonial pipeline is privately owned by several partnerships that include the billionaire Koch brothers, Shell Oil and private equity firm Kohlberg Kravis Roberts as investors.

Plantation Pipe Line operates a 3,100-mile network that runs from Louisiana to Washington, D.C. The system, which dates from 1942, handles up to 29 million gallons of gasoline, jet fuel and other fuels daily.

In 2000, Kinder Morgan Energy Partners bought a major stake in Plantation and now operates the pipeline.

Colonial’s main pipeline that sprang a leak is its 1962-era, 40 inch pipeline that typically handles gasoline. In a major expansion in 1979, it added a 36-inch diameter pipeline that usually handles diesel and other “distillate” fuels.

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