Shell Pipeline Holds Open Season For Houma-to-Houston Project

April 2013, Vol. 240 No. 4

Shell Pipeline announced the start of a limited supplemental binding open season for additional firm capacity commitments on the Houma-to-Houston pipeline system reversal project. The limited supplemental open season will offer contract transportation rates for the route from Houston to St. James/Clovelly, LA.

Shell Pipeline’s Ho-Ho Reversal project will provide west-to-east pipeline access to additional crudes across the 300 miles of the U.S. Gulf of Mexico refining complex. Those crudes include the domestic crude oil production increases in Texas and the mid-continent, including the Permian, Eagle Ford, and Bakken Shale plays, as well as the growing crude supplies in the Cushing, OK area. Additionally, the Ho-Ho Reversal project will complement the new pipeline infrastructure that is currently being built to the Houston and Nederland areas.

During the limited supplemental binding open season period which began Feb. 25 and continued until March 27, 2013, interested shippers had an opportunity to submit a binding bid for firm capacity from Houston to St. James/Clovelly on the Ho-Ho Reversal. Incremental firm capacity of 75,000 bpd was offered, contingent upon receiving sufficient bids in the open season to support the installation of additional pumping capacity.

The initial phase of the Ho-Ho reversal was completed in January with deliveries of crude oil being moved from connecting pipelines and terminals in east Houston to the Nederland/Port Arthur area. Shell Pipeline is continuing construction work on the next phase that would enable crude originating in the Houston and Port Arthur area to be accessible to Louisiana markets.

Once completed, the Ho-Ho Reversal project would reverse the existing Ho-Ho service to connect the Houston and Port Arthur markets with the Louisiana markets. The Ho-Ho Reversal could enable the distribution of 300,000 bpd of crude across the region, depending upon crudes types shipped.