Shell says Westward Ho pipeline on hold
Royal Dutch Shell Plc has put its 300,000 barrels per day Louisiana-to-Texas Westward Ho oil pipeline project on hold as newer pipelines have already swamped the region with hundreds of thousands of barrels of domestic light sweet crude per day.
The company confirmed on Tuesday that it decided to delay construction on the pipeline to focus on securing more commitments from shippers.
The line had been slated to start up in the third quarter of 2015, but now the company estimates construction will wrap up in 2017, spokeswoman Kimberly Windon said.
Shell has twice cut the proposed capacity from an initial 900,000 bpd to 600,000 in 2011, and again to 300,000 bpd in mid-2012, after shippers submitted fewer binding commitments.
Westward Ho was proposed to move light sweet crude oil from the St. James, Louisiana, crude terminal to markets and pipeline connections just across the Texas state line in Port Arthur and Nederland.
The other pipelines servicing the region include TransCanada Corp’s 400,000 bpd MarketLink, which began moving crude to Nederland in January this year from the once-clogged U.S. crude futures hub in Cushing, Oklahoma.
Enterprise Products Partners LP told regulators earlier this month that it would start up a new pipeline connecting its terminal south of the Houston Ship Channel to Nederland by Wednesday.
Nederland also is a delivery point along a 250,000 bpd segment of Shell’s reversed Houston-to-Houma, Louisiana, pipeline. Shell first proposed reversing that line to move increased Texas oil production to Louisiana refineries. Westward Ho was seen as restoring east-to-west movement of foreign crudes, as well as Gulf of Mexico output to Texas markets.
However, Shell said Westward Ho remains viable despite the pause.
“Shell Pipeline believes there will be a need for additional crude transportation capacity along the route of the Westward Ho pipeline in the near future and will continue to review the project to ensure it is designed to provide the best value for Shell and our customers,” the company added.
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