Motor-fuel conveyor to expand pipeline capacity

Colonial Pipeline, a major conveyor of motor fuels to Hampton Roads, said Monday it will expand its capacity for delivering gasoline, diesel and other petroleum products to the region by 20 percent early next year.

Colonial is able to expand its service because an idled oil refinery in Yorktown made its storage tanks available for fuel deliveries in the region, Steve Baker, a spokesman for Atlanta-based Colonial, said.

The expansion, scheduled to be completed during the first quarter of 2012, will increase the pipeline's capacity for fuel deliveries to Hampton Roads by 1 million gallons a day, Baker said.

The work will involve adjustments to parts of its pipeline in Richmond and Yorktown, Colonial said. The dollar amount of this investment wasn't immediately available, Baker said.

While demand for refined products has been slack in the Northeast because of a weak economy, increased capacity would ease constraints on the pipeline when demand for motor fuels is robust, Baker said. During periods of especially strong demand, Colonial has had to ration space for shipments to terminals.

Western Refining Inc. suspended production at the Yorktown refinery in September 2010, citing what it said were weak oil-refining margins on the East Coast. The El Paso, Texas-based refiner said at the time that it would continue operating a products terminal and storage facility at the Yorktown facility.

Colonial's work in Virginia is part of a broader expansion effort, including improvements to stretches of pipeline between Baton Rouge, La., and Atlanta that have already begun.

Earlier this year, the company announced plans to expand the capacity at the northern end of its pipeline by more than 4 million gallons a day.

The pipeline carries gasoline, diesel, jet fuel and heating oil from Gulf Coast refineries to metro areas as far north as New York City.

Tom Shean, (757) 446-2379, tom.shean@pilotonline.com