By Catherine Ngai
NEW YORK, July 22 (Reuters) - Royal Dutch Shell's Houston-to-Houma pipeline meant to relieve bottlenecks in thecountry's oil hub has been plagued by mechanical issues thathave led the line to run below capacity though traders said onTuesday volumes are expected to increase.
The most recent data from the Louisiana Department ofNatural Resources shows that the pipeline had a throughput ofbarely one-third of its capacity in each of the first fourmonths of the year.
The market expects volumes to more than double in comingmonths as a result of increased shipper access and resolution ofthe mechanical issues.
Shell does not comment on flow rates to protect shipperconfidentiality, said company spokeswoman Destin Singleton.
The line, known as the Ho-Ho, previously flowed from Houmato Houston, connecting the Louisiana Offshore Oil Port and GulfCoast producers to Houston's refineries. As domestic crudeproduction from shale surged, a need to bring crude from Texasto oil refineries in Louisiana grew, so the pipeline wasreversed.
The 360,000-barrel-per-day (bpd) reversed pipeline cameonline in December at a time when the market needed relief froma supply bottleneck that plagued the Houston area.
But, in April, throughput was 108,607 bpd, according to aReuters calculation, while March figures showed a throughput of113,448 bpd in March. In February, the figure was 97,297 bpd,the Louisiana DNR's data showed.
According to two traders, not all shippers were "activated"at the time when the pipeline was started last year. A new batchof shippers should have started shipping in May, which shoulddouble the throughput rates significantly.
The pipeline has faced its fair share of operational issuesin the past, including a pipeline shutdown in March following apuncture and subsequent leak near Port Neches, Texas.
The Ho-Ho system was also shut for planned maintenanceearlier this year, barely a month after Shell reversed theline's flow and began commercial service.
The Ho-Ho pipeline system also includes a 500,000 bpd linefrom Houma to the Louisiana Offshore Oil Port's (LOOP) Clovellyhub in Louisiana, and a 300,000-bpd segment from Houma to St.James, Louisiana. (Reporting By Catherine Ngai; Editing by Jessica Resnick-Ault;Editing by Diane Craft)