Kinder Morgan has begun redirecting ethanol delivery trucks bound for its Argo, Illinois, terminal to its nearby Stony Island facility, according to a customer notice seen Thursday by S&P Global Platts.
"Kinder Morgan Argo will stop accepting inbound ethanol trucks the morning of Thursday, May 11," the Wednesday evening notice said.
The notice added that the last truck to unload at Argo was at 7 am CDT Thursday. The company will notify customers by email when deliveries can resume.
This is the second time this year that Argo has redirected deliveries away from Argo. The company began turning away deliveries in February as high stock levels prompted the move to balance inventories between the terminals.
Sources said at the time that Kinder Morgan needed to make room at Argo for large inbound rail deliveries.
Stock levels have remained high over the past several weeks despite plant turnarounds trimming output.
US ethanol inventories fell 158,000 barrels to 23.055 million barrels in the week ended May 5, according to the Energy Information Administration. Sources have said that closer to 22 million barrels represents a balance between supply and demand.
Midwest stocks fell 89,000 barrels to 7.932 million barrels in the week ended May 5.
The Midwest has seen a higher year-on-year build than any other region, with stocks hovering over 1 million barrels higher than last year for the past several weeks.
Prices reacted in morning trading, with Argo for delivery any time in May trading at $1.44/gal after S&P Global Platts assessed Argo at $1.4150/gal Wednesday.
The Argo and Stony Island terminals comprise Kinder Morgan's fungible system. So even though deliveries to Argo have ceased, market participants can continue to trade Argo product even if the physical barrels are at the Stony Island terminal.
Kinder Morgan spokesman Richard Wheatley said the company could not confirm activities at Argo.
"For competitive reasons, we don't comment on inventory levels at our terminals or fluctuations in storage capacity related to supply and demand or other market-related issues," he said. "Nor do we comment on information that we share directly with our customers."
