NEW YORK, Dec 16 (Reuters) - Royal Dutch Shell on Monday started the reversed Houston-to-Houma pipeline, giving U.S. Gulf Coast refineries a new route to access cheap crude supplies.
The start came after Shell completed the second phase of its Ho-Ho project, which reversed flow on a 360,000 barrels-per-day (bpd) pipeline from Port Neches, Texas to Houma, Louisiana and a 500,000 bpd line from Houma to the Louisiana Offshore Oil Port’s (LOOP) hub in Clovelly, Louisiana.
Another, 300,000 bpd segment will ferry crude from the Houma terminal to St. James, Louisiana.
The reversed system will give U.S. Gulf Coast refineries access to “the growing crude production from the inland oil plays in the Eagle Ford, Bakken and other shale regions,” the company said in a press release.
It will also relieve a supply glut that is emerging on The Texas Coast as more pipelines ship crude away from the U.S. Midwest. Canadian TransCanada alone is expected to start its 700,000 barrels-per-day pipeline from Cushing, Oklahoma to Port Arthur, Texas by mid-January.
Two additional phases of the Ho-Ho pipeline project will add pumping stations at Channelview and Port Neches in Texas and add 50,000 bpd capacity to the Houston-to-Port Neches segment of the pipeline and 15,000 bpd to the Port Neches-to-Houma segment.
The capacity additions will be completed by early next year, Shell said.
The Ho-Ho pipeline originally carried oil from Louisiana to Texas. In January, Shell reversed the segment from Houston to Port Neches and, in August, shut the line from Houma to Houston to complete the reversal.
The company had submitted tariffs with the Federal Energy Regulatory Commission last week that went into effect on Thursday.