NEW YORK, Jan 9 (Reuters) - The U.S. pipeline regulator hasprovisionally accepted proposed rates for non-contract shipperson Royal Dutch Shell's newly reversed Ho-Ho crude oilpipeline, pending a hearing into complaints that they areunfair.
The U.S. Federal Energy Regulatory Commission (FERC) said ithad "accepted and suspended" tariffs on the line, which has beenreversed in order to carry crude from Houston, Texas to Houma,Louisiana. It called for a hearing to determine whether theinitial rates were "just and reasonable".
A lawyer familiar with such cases said the decision meantthat operations on the line would be allowed to proceed,although shippers could be eligible for a refund if Shell'sproposed rates are deemed unreasonable.
Generally these kinds of actions are met with a settlementbetween the pipeline operator and shippers, the lawyer said.
A FERC spokeswoman was not immediately able to comment onthe ruling. A Shell spokeswoman was unable to comment.
The so-called Ho-Ho pipeline is one in a series of growinginfrastructure projects supporting the U.S. oil boom. Shellreversed the pipeline's direction to send crude oil from growingproducing fields in Texas to refiners in Louisiana.
The project 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.
Anadarko Petroleum Corp, ConocoPhillips, Marathon OilCompany and Pioneer Natural Resources USA filed motions tointervene with FERC. The potential shippers on the linecomplained that the rates on the line reversal "aresubstantially higher than the rates it charged for service onthe same pipeline facilities in the opposite direction."
Shell argues it was "under-recovering its cost-of-service"on the pipeline rates before the reversal.
FERC's decision went into effect on Dec. 12, four daysbefore Shell said it had started the pipeline.
FERC said the tariff rates "have not been shown to be justand reasonable and may be unjust, unreasonable, undulydiscriminatory or otherwise unlawful."
Shell has 30 days from the order date file "cost, revenue,and throughput data," with FERC.