Shell greenlights Louisiana-to-Texas pipeline of reduced capacity

07 13, 2012 by Business Report

A new crude oil pipeline from a key terminal in St. James to refineries near Port Arthur, Texas, will be built at about half the size envisioned late last year, Shell Pipeline announced Thursday after securing customer commitments for the project.

Reuters reports the Westward Ho Pipeline, which will carry crude oil from Louisiana to Gulf of Mexico refiners just across the Texas border, will have an initial capacity of 300,000 barrels per day, citing the subsidiary company of Royal Dutch Shell—which hopes to start the pipeline by the third quarter of 2015 if it secures regulatory approval.

Shell had initially proposed a 900,000 bpd line when it started soliciting interest during an informal "open season" last year. That figure had shrunk to 600,000 bpd by December, when Shell reported it had received an "encouraging response." The latest capacity was determined "based on open season results," company spokeswoman Kayla Macke says. "But [the line] may be expanded to handle a materially higher volume by adding pumping capacity subject to shipper demand." The St. James terminal is the delivery point for the Gulf Coast physical crude benchmark Light Louisiana Sweet. It is also a major destination for Bakken crude oil from North Dakota that is delivered on rail cars.