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Delaware port operator can't block access to fuel tanks

RANDALL CHASE

DOVER, Del. (AP) — A Delaware judge has granted a preliminary injunction preventing the company that operates the Wilmington port from blocking access to an adjacent fuel storage terminal while he mulls a fee dispute with the owner of the terminal.

The judge’s ruling Wednesday comes a week after he temporarily extended a restraining order he issued in April against port operator GT USA Wilmington while he considered a request by Buckeye Partners for a preliminary injunction.

The injunction prohibits GT from blocking access to tanks holding gasoline and diesel fuel for distribution to gas stations and convenience stores throughout the mid-Atlantic region. The Wawa convenience store chain accounts for about 85% of Buckeye’s business at the port.

Texas-based Buckeye, which manages more than 6,200 miles (9,970 kilometers) of petroleum pipelines and more than 100 truck-loading terminals, acquired the storage terminal from Magellan Midstream Partners in March. The company also acquired leased dock space from which it offloads petroleum products from marine vessels through a pipeline and into the storage tanks.

Vice Chancellor J. Travis Laster said the injunction will remain in place while Buckeye and GT litigate a dispute over GT’s claim that Buckeye owes more than $1 million in terminal usage fees. Buckeye has argued that it does not owe the fees and that, even if it did, GT had no right to block access to Buckeye’s storage tanks, which are accessible only by a private road running through the port property.

“Buckeye has shown a reasonable probability of success on the merits of its claims,” Laster said, adding Buckeye also has established a threat of irreparable harm if access to its tanks is blocked.

“Absent an injunction, GT will resume its blockade and force Buckeye to capitulate,” the judge wrote. “Due respect for the rule of law requires that a court decide the underlying dispute.”

GT USA Wilmington is a subsidiary of port management company Gulftainer, which is based in the United Arab Emirates.

State officials inked a deal in 2018 under which Gulftainer obtained the rights to operate the port for 50 years in exchange for agreeing to make significant upgrades and to pay the state about $10 million annually in concession fees based on the volume of various types of cargo traveling through the port.

After taking over the port, GT imposed a new tariff structure, which includes a new volume-based “terminal usage fee” on stevedoring, which is the physical handling of containers and cargo from vessels.

Buckeye argued, as did Magellan, that it does not use third-party stevedores, and that hooking up hoses to send petroleum products through a pipeline to its storage terminals is not subject to the terminal usage fee.

GT has argued that Buckeye does act as a stevedore, at least for Wawa, and that it owes GT at least $1 million for breaching the terms of the tariff and its lease. GT also argues that Buckeye has no valid easement right over the port’s main gate road, and that Buckeye’s lease payments do not cover the same services as the tariff.

The dispute escalated in April to the point that the port operator blocked Wawa fuel trucks from accessing the storage terminal. Buckeye filed a motion that same day for a temporary restraining order.