HOUSTON – On Monday, Shell, the oil major, said it plans to shut-in different portions of its Zydeco pipeline system for maintenance for three to four days starting September 24, limiting flows of some light crude to Louisiana.
The Zydeco pipeline system spans over 350 miles (563.27 km) and has a mainline capacity of about 375,000 barrels/day. It has four segments and ships crude oil from Houston, Texas to St. James, Louisiana.
According to Shell Midstream Partners’ website, the system alleviates transportation bottlenecks of crude arriving in Houston from the Eagle Ford, Permian, and Bakken regions.
The pipeline shut-in will reduce the amount of light crude, such as Bakken crude, West Texas Light, and West Texas Intermediate (WTI) supplied into Louisiana, where it becomes a part of the Light Louisiana Sweet blend.
Light Louisiana Sweet’s premium to WTI crude has largely remained narrow in recent days. It strengthened to about $1.38 premium per barrel to U.S. crude on Friday.
The pipeline also moves Poseidon crude from Houma, on the Louisiana coast, inland to the St. James crude hub that serves a pipeline connecting to several oil refineries. The grade traded at a $2.25 a barrel discount to WTI on Friday.
(Source: Reuters)
