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Florida sees some gasoline shortages following hurricane as vessels wait for ports to reopen


Gasoline, diesel vessels on standby for key Florida ports to reopen

Kinder Morgan's Central Florida Pipeline remains closed

US Gulf Coast waterborne CBOB prices holding steady

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Shippers were ready to move gasoline and diesel to Florida Sept. 29 once the US Coast Guard reopens ports following the passing of Hurricane Ian.

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Ian, which made landfall on Florida's west coast on Sept. 28 as a powerful Category 4 hurricane, weakened as it moved across the state. The National Hurricane Center called for Ian to strengthen into a hurricane again before making landfall in South Carolina Sept. 30, after which it is expected to rapidly weaken.

The hurricane caused widespread power outages in Florida, causing retail gasoline station outages. The number of electricity customers without service approached about 2.8 million as of 11 am ET Sept. 29. NextEra Energy's Florida Power & Light -- the hardest hit -- had 1.2 million customers offline, 21.2% of the utility's 5.6 million customers.

"With Ian now past some of the threat areas we could see outages start to inch up again until supply chains start moving again," said Patrick De Haan, an analyst with GasBuddy.

The Tampa-St. Petersburg region had around 26% of stations down around 3 pm ET Sept. 29, according to GasBuddy.

Florida depends on waterborne refined products, as there are no refineries in the state. But shippers are ready to move supply into Florida once ports are reopened.

"Operators report that there are over 25 domestic vessels that are expected to call on Florida ports with deliveries once the ports are reopened by the Coast Guard," according to a Sept. 28 statement from the American Maritime Partnership. "These vessels are carrying critical cargoes, including over 220 million gallons of fuel, among other cargo."

"Among these vessels are some that are prepositioned for immediate arrival after the ports are reopened, as well as vessels that are scheduled to call on Florida ports within days of the storm making landfall," the statement added.

No fuel waivers were issued by the US Environmental Protection Agency as of Sept. 29, nor were any Jones Act waivers issued for Florida. On Sept. 28, the US Department of Homeland Security issued a temporary Jones Act waiver to allow non-US flagged vessels to supply fuel to Puerto Rico in the wake of Hurricane Fiona.

Ports, pipeline reopening imminent

Shippers expect the Port of Tampa, shut by the US Coast Guard (USCG) Sept. 27 ahead of the storm, to reopen about midday Sept. 30, as shippers noted Tampa was not seriously impacted.

"My latest information is that USCG will conduct aerial and surface inspection of port and channel this afternoon and early tomorrow morning, with the expectation that the port will reopen around noon tomorrow," said one shipper on Sept. 29.

Tampa and surrounding ports are key distribution points for the flow of gasoline and distillates from US Gulf Coast refineries into the state to Florida.

About 11.3 million barrels of gasoline blending components, primarily CBOB, and about 3.9 million barrels of distillate moved via barge and tanker from the USGC to the lower USAC in June 2022, according to most recent monthly US Energy Information Administration data.

Some barrels are transported via Kinder Morgan's Central Florida Pipeline, a 110-mile pipeline that runs from Tampa to Orlando, which was closed Sept. 29.

"We are in the preliminary stages of assessing the damage caused by Hurricane Ian, as we are still waiting for waters to recede and roads to reopen before we can fully assess our facilities," said Kinder Morgan spokesperson Amy Baek.

The company expects to reopen its Tampa facility late Sept. 29 and resume service on the pipeline by Oct. 1, Baek said. Kinder also hopes to reopen its Orlando facility later Sept. 29.

"Our Port Manatee, Port Sutton and Tampaplex terminals appear to have experienced minimal damage, and we are evaluating recovery and restart plans for a potential reopening of our facilities" on Sept. 30, she said.

The Central Florida Pipeline moves gasoline and denatured ethanol via a 16-inch line and diesel and jet fuel via an 18-inch line.

Port Everglades, another key refined product storage and blending hub, is already open while Port Canaveral, which was shut Sept. 28, is expected to open late Sept. 29 or perhaps Sept. 30 after the USCG completes is port assessment.

Jacksonville's port, closed Sept. 28, is unlikely to reopen until Sept. 30, shipping sources said.

Colonial Pipeline 'closely monitoring' storm

On Sept. 29, USCG set South Carolina, including Charleston, to port condition Zulu, which means that no vessels may enter or leave the port and ship-to-shore operations are prohibited.

As Ian makes its way north, Colonial Pipeline, the largest refined products pipeline in the US, running from Texas to New Jersey, is monitoring the storm.

"We are closely monitoring the forecast to ensure we are well prepared as Hurricane Ian tracks up the East Coast," said Colonial Pipeline spokesperson Meredith Stone in a Sept. 29 email.

"While no impacts to the system are expected, Colonial teams are taking actions to lessen potential impacts, including preparing facilities along the storm's projected path," she said.

Hurricane Ian had little impact on spot refined products prices, with US Gulf Coast waterborne CBOB seen holding at a 2 cents/gal premium to CBOB pipeline late Sept. 29.

"No real impact; it was already considered," said one trader.