NEW YORK, Dec 16 (Reuters) - Royal Dutch Shell on Mondaystarted the reversed Houston-to-Houma pipeline, giving U.S. GulfCoast refineries a new route to access cheap crude supplies.
The start came after Shell completed the second phase of itsHo-Ho project, which reversed flow on a 360,000 barrels-per-day(bpd) pipeline from Port Neches, Texas to Houma, Louisiana and a500,000 bpd line from Houma to the Louisiana Offshore Oil Port's(LOOP) hub in Clovelly, Louisiana.
Another, 300,000 bpd segment will ferry crude from the Houmaterminal to St. James, Louisiana.
The reversed system will give U.S. Gulf Coast refineriesaccess to "the growing crude production from the inland oilplays in the Eagle Ford, Bakken and other shale regions," thecompany said in a press release.
It will also relieve a supply glut that is emerging on TheTexas Coast as more pipelines ship crude away from the U.S.Midwest. Canadian TransCanada alone is expected tostart its 700,000 barrels-per-day pipeline from Cushing,Oklahoma to Port Arthur, Texas by mid-January.
Two additional phases of the Ho-Ho pipeline project will addpumping stations at Channelview and Port Neches in Texas and add50,000 bpd capacity to the Houston-to-Port Neches segment of thepipeline and 15,000 bpd to the Port Neches-to-Houma segment.
The capacity additions will be completed by early next year,Shell said.
The Ho-Ho pipeline originally carried oil from Louisiana toTexas. In January, Shell reversed the segment from Houston toPort Neches and, in August, shut the line from Houma to Houstonto complete the reversal.
The company had submitted tariffs with the Federal EnergyRegulatory Commission last week that went into effect onThursday.
