Shell to Shut Zydeco Pipeline for Maintenance

By Arathy Somasekhar

HOUSTON (Reuters) – Oil major Shell (LON:SHEL) announced plans to temporarily shut down sections of its Zydeco pipeline system for maintenance from September 24 for three to four days. This shutdown will limit flows of certain light crude to Louisiana.

The Zydeco pipeline system stretches over 350 miles (563.27 km) with a mainline capacity of approximately 375,000 barrels per day. It has four segments, transporting crude oil from Houston, Texas, to St. James, Louisiana.

This system helps alleviate transportation bottlenecks for crude coming into Houston from regions like Eagle Ford (NYSE:F), Permian, and Bakken, as indicated on Shell Midstream (NYSE:SHLX) Partners’ website.

The temporary pipeline closure is expected to decrease the amount of light crude supplied to Louisiana — including Bakken crude, West Texas Light, and West Texas Intermediate (WTI) — which is blended into the Light Louisiana Sweet mix.

Recently, Light Louisiana Sweet has maintained a narrow premium to WTI crude, which was noted to be about $1.38 per barrel higher on Friday. The pipeline also transports Poseidon crude from Houma, Louisiana, to the St. James crude hub, serving refineries. This grade was trading at a $2.25 a barrel discount to WTI on Friday.