Business
Shell to shut-in portions of Louisiana Zydeco oil pipeline for maintenance
Global Banking & Finance Review®
Company
By Arathy Somasekhar
HOUSTON (Reuters) -Oil major Shell on Monday said it plans to shut-in different portions of its Zydeco pipeline system for maintenance for three to four days starting Sept 24, limiting flows of some light crude to Louisiana.
The Zydeco pipeline system, which spans over 350 miles (563.27 km) and has a mainline capacity of about 375,000 barrels per day, has four segments and ships crude oil from Houston, Texas to St. James, Louisiana.
The system alleviates transportation bottlenecks of crude arriving in Houston from the Eagle Ford, Permian and Bakken regions, according to Shell Midstream Partners’ website.
The pipeline shut-in will reduce the amount of light crude, such as Bakken crude, West Texas Light and West Texas Intermediate (WTI) supplied into Louisiana, where it becomes a part of the Light Louisiana Sweet blend.
Light Louisiana Sweet’s premium to WTI crude has largely remained narrow in recent days. It strengthened to an about $1.38 premium per barrel to U.S. crude on Friday.
The pipeline also moves Poseidon crude from Houma, on the Louisiana coast, inland to the St. James crude hub that serves pipeline connecting to several oil refineries. The grade traded at a $2.25 a barrel discount to WTI on Friday.
(Reporting by Arathy Somasekhar in Houston; editing by Gary McWilliams)
A pipeline is a system of pipes used to transport liquids or gases over long distances. In the oil and gas industry, pipelines are crucial for moving crude oil from production sites to refineries.
Crude oil is a natural, unrefined petroleum product composed of hydrocarbon deposits and other organic materials. It is extracted from the ground and refined into various fuels and products.
Maintenance refers to the routine checks and repairs performed on pipelines to ensure they operate safely and efficiently. This includes inspections, cleaning, and fixing any leaks or damages.
West Texas Intermediate (WTI) is a grade of crude oil used as a benchmark in oil pricing. It is known for its high quality and low sulfur content, making it desirable for refining.
A crude hub is a central location where crude oil is collected, stored, and distributed. These hubs facilitate the efficient transfer of oil to refineries and other markets.
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