Pipeline race begins to fill void left by California refinery closures

Rival refiners bet on waterborne fuels

While a new pipeline could provide some stability to regional gasoline prices, refining executives have questioned whether any will ultimately get built, pointing to California’s access to waterborne fuels.

"In terms of the pipelines that are rumoured to come into the region, I would say that’s a big if," said Rick Hessling, chief commercial officer for Marathon Petroleum, adding the timing and transportation cost of waterborne barrels trumped pipelines.

Valero Energy, the second-largest independent refiner, is unlikely to commit to a long-term shipping arrangement with any of the three projects, Chief Operating Officer Gary Simmons said during an investor call last month.

"We like the waterborne option because it allows you to source barrels from anywhere in the world and take advantage of international arbs that can be open," Simmons said, referring to price arbitrage opportunities.

(Reporting by Nicole Jao and Shariq Khan in New York; Editing by Nia Williams)