Ho-Ho pipeline struggles

Royal Dutch Shell's Houston-to-Houma pipeline - meant to relieve bottlenecks in the country's oil hub - has been plagued by mechanical issues that have led the line to run below capacity, although volumes are expected to increase.

The most recent data from the Louisiana Department of Natural Resources shows that the pipeline had a throughput of barely one-third of its capacity in each of the first four months of the year.

The market expects volumes to more than double in coming months as a result of increased shipper access and resolution of the mechanical issues.

Shell does not comment on flowrates, in order to protect shipper confidentiality.

The line, known as the Ho-Ho, previously flowed from Houma to Houston, connecting the Louisiana Offshore Oil Port and Gulf Coast producers to Houston's refineries.

As domestic crude production from shale surged, a need to bring crude from Texas to oil refineries in Louisiana grew, so the pipeline was reversed.

The 360 000 bpd reversed pipeline came online in December at a time when the market needed relief from a supply bottleneck that plagued the Houston area.

But, in April, throughput was 108 607 bpd, according to a Reuters calculation, while March figures showed a throughput of 113, 448 bpd in March. In February, the figure was 97 297 bpd, the Louisiana DNR's data showed.

The Ho-Ho pipeline system also includes a 500 000 bpd line from Houma to the Louisiana Offshore Oil Port's (LOOP) Clovelly hub in Louisiana, and a 300 000 bpd segment from Houma to St. James, Louisiana.

Edited from various sources by Elizabeth Corner

Read the article online at: https://www.worldpipelines.com/business-news/23072014/ho-ho-pipeline-struggles-667/