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Tuesday, November 29, 2022

Judge rules against Delaware port operator in tariff dispute

DOVER, Del. ( Associated Press) – The company operating the Port of Wilmington under an agreement with the State of Delaware is not entitled to charge terminal user fees of the operator of a petroleum unloading operation and can not the operator or its customers prevented from accessing. an adjacent fuel storage terminal, a judge ruled Tuesday.

The decision by Vice-Chancellor J. Travis Laster comes almost two years after he issued a preliminary injunction banning port operator GT USA Wilmington from denying access to storage tanks owned by Buckeye Partners that hold petrol and diesel for distribution to filling 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.

Buckeye, Texas, which operates more than 6,200 miles (9,970 kilometers) of petroleum pipelines and more than 100 truck loading terminals, acquired the Magellan Midstream Partners salvage terminal in early 2020. The company also acquired leased dock space from which it unloads petroleum products from seagoing vessels through a pipeline and into storage tanks.

However, a dispute arose when GT claimed that Buckeye owed him more than $ 1 million in terminal use fees under tariffs he issued in 2018 and again in 2020 on storage doors or parties involved in storage doors, affecting the physical handling of containers and cargo from ships.

In April 2020, the dispute escalated to the point that GT USA prevented Wilmington Wawa fuel trucks from gaining access to the storage terminal.

GT USA Wilmington is a subsidiary of the port management company Gulftainer, based in the United Arab Emirates. In 2018, government officials entered into an agreement under which Gulftainer acquired 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. on the volume of different types of cargo traveling through the port.

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After GT took over the port, GT introduced a new tariff structure, which included a new volume-based “terminal usage fee” on storage doors. GT admitted that it imposed the terminal usage fee to cover the cost of the concession fee it had to pay to the state.

However, Magellan refused to pay the terminal usage fee, arguing that it was not a congestion and also not engaged in congestion. Buckeye maintained that position after acquiring Magellan, arguing that he did not owe the fees and that, even if it did, GT had no right to block access to Buckeye’s storage tanks, which are only accessible by private roads. which runs through the harbor property.

Buckeye, like Magellan, argued that he does not use third-party storage doors, and that the connection of hoses to send petroleum products from tankers through a pipeline to its storage terminals is not subject to the terminal usage fee.

GT objected that Buckeye had indeed acted as a stumbling block, at least for Wawa, and that he owed GT at least $ 1 million for violating the terms of the tariff and the lease. GT also argued that Buckeye has no valid inheritance right over the port’s main gateway, and that Buckeye’s rent payments do not cover the same services as the tariff.

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The judge disagreed and ruled in favor of Buckeye.

“On the first issue, the company proved that it did not owe the terminal usage fees, because it was not a congestion or busy congestion,” Laster wrote. The judge said that the definition of stuwadoor in the 2018 tariff clearly does not apply to Buckeye, and that the definition in the 2020 tariff, which redefines the term, was ambiguous. Since GT was the sole drafter of the tariff, any ambiguity should be kept against GT, Laster said.

Laster also ruled that the rent Buckeye pays for the dock space lease entitles him to use the terminal as usual, without paying any additional amounts, and that GT provided no incremental services in exchange for the 2018 usage fee.

“The contractually agreed rent therefore takes precedence and prevents the imposition of the 2018 usage fee,” he wrote.

As for access to the storage tanks, Laster said Buckeye has proved that the company has the right to use the disputed roads in connection with its terminal business.

“We appreciate Vice – Chancellor Laster’s thoughtful decision and the court’s thorough review of this important matter,” Buckeye Partners said in a prepared statement.

A GT USA Wilmington spokesman did not immediately respond to a request for comment.

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