Kinder Morgan shuts Tampa, Florida refined products terminals, pipelines ahead of Hurricane Milton

Kinder Morgan shut its Tampa Bay, Florida refined products terminals as well as its Central Florida Pipeline system in preparation for Hurricane Milton, the company said Oct. 8.

"Based on our current understanding of Hurricane Milton’s path and intensity, we have shut down our pipelines that are part of the Central Florida Pipeline system," spokesperson Carolina Olivares said Oct. 8. "While the Tampa terminal is shut down, our Orlando truck racks are expected to remain operational until winds exceed 35 miles per hour."

Florida does not have any oil refineries so imports much of its gasoline, diesel and jet fuel. Waterborne refined products are regularly imported into Tampa, where Kinder Morgan operates several terminals.

Kinder shut both of its Central Florida pipelines, which deliver refined products from Tampa to Orlando, the company said.

Kinder's 10-inch line, which mainly transports diesel and jet fuel, was restarted Oct. 2 after being down for a week because of Hurricane Helene. The 16-inch line, which transports gasoline and batched denatured ethanol, was also shut down briefly due to Helene.

The US National Hurricane Center was forecasting “devastating hurricane-force winds” off the west coast of Florida when Milton arrives as a Category 4 storm late Oct. 9 with windspeeds of around 150 mph.

With residents evacuating the area, fuel supplies have tightened in central Florida.

"Several Tampa fuel terminals have shut off supply in preparation for Hurricane Milton," fuel distribution company Mansfield Energy said Oct. 8 on its website. "Others are closing this week for planned maintenance, which will further restrict the market [and] carrier capacity remains limited, with long lines at the terminals continuing to reduce capacity."

"While long-hauling deliveries are currently possible, many carriers are beginning to pull trucks off the road," Mansfield Energy said. "Because of evacuation traffic, fuel trucks driving south to Tampa cannot easily turn north to access available markets, creating further challenges for logistics."

Mansfield expects fuel trucks will come to a near-halt by Oct. 9 as wind speeds are likely to exceed 35 mph, making it unsafe to transport on the road, while future damage from the hurricane is expected to prolong the disruption.

Gasoline market sources said demand after the storm will likely drop as flooded roadways and power outages reduce the ability to travel.

"Power outages will likely be a big issue and a direct hit to Tampa area could do some damage to the docks and tanks, potentially," one source said. Depending on the damage, emergency gasoline supplies could be delivered on trucks to affected areas, but "you have to have roads" for that to happen, the source said.

"Evacuations initially trigger spikes in retail gasoline demand, but those tend to be short-lived," S&P Global Commodity Insights analysts James Bambino and Richard Joswick said. "This evacuation is set to be larger than normal, and many residents -- especially in the Tampa metropolitan area -- are likely still displaced from Hurricane Helene last week."

"We estimate that impacted areas along the Florida coast could experience between three and 10 days of driving loss, with between 90%-100% loss during the storm and 50%-75% loss in the recovery phase, all depending on the final storm track and local response capabilities," the analysts said.

Tampa waterborne CBOB was assessed at a 9 cents/gal premium to Gulf Coast Colonial CBOB by Platts Oct. 8, slipping 1.25 cents on the day. Port Everglades waterborne CBOB, on Florida's East Coast, was assessed at a 4.5 cents/gal premium to the Gulf Coast, down 2.6 cents. Platts is part of Commodity Insights.

Sources anticipated that prices might climb once Hurricane Milton passes, and fuel deliveries increase, especially into Tampa Bay.

Offshore impact limited

Milton's impact to offshore oil and gas production has so far been minimal as the storm has passed south of most rigs.

Chevron shut its deepwater Blind Faith platform in the Gulf of Mexico as the facility is one of a string of deepwater platforms just northwest of the storm’s current trajectory, the company said Oct. 7.

The Blind Faith platform is moored in 6,500 feet of water about 160 miles southeast of New Orleans. It brings in oil from four wells in 7,000 feet of water, according to the company.

ExxonMobil, Shell, and Murphy Oil said operations were continuing as normal Oct. 8. W&T Offshore was not available for comment.

The Port of Tampa Bay remained shut to all inbound and outbound vessel traffic, according to the US Coast Guard. The ports of Jacksonville and Fernandina were also closed to traffic.

The Port of Miami and Port Everglades were both under conditional restrictions that limited vessel traffic, but preparations were being made in the case that ports need to close.