Buckeye Pipe Line Co. LP reached a settlement resolving all complaints filed with the Federal Energy Regulatory Commission (FERC) by Delta Air Lines, JetBlue Airways, United/Continental Air Lines, and US Airways/American Airlines challenging Buckeye Pipe Line’s rates for jet fuel transportation from New Jersey to three New York City-area airports, parent company Buckeye Partners LP said June 19.
“We are pleased to enter into this agreement, resolve these longstanding issues, and commit to improvements that will likely enhance the utilization of our pipeline systems to these airports,” said Clark C. Smith, chairman, president and CEO at Buckeye.
To resolve the complaints, Buckeye Pipe Line will reduce its jet fuel rates and make settlement payments to the listed airlines. These actions will close pending litigation, Buckeye added.
Reducing the fuel rates will not materially impact Buckeye’s operating results. Buckeye also will install facilities to increase the flexibility and capacity of its system in shipping jet fuel to John F. Kennedy International Airport. A mechanism for compensation will be provided.
The settlement also resolves the airlines’ challenge to Buckeye Pipe Line’s application for market-based rate authority in the New York City market. Buckeye will withdraw its application concerning the airports around the city, but will continue the application for the market destinations.
All parties submitted the settlement to FERC for approval, and FERC will rule in the third quarter of this year, Buckeye said.
Houston-based Buckeye Partners LP is a midstream MLP working in the U.S. and Caribbean.
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