Houston, TX – Zydeco Pipeline Company LLC (Zydeco), jointly owned by Shell Pipeline Company LP and Shell Midstream Partners, L.P. (NYSE: SHLX), announced today the start of a Non-Binding Open Season. Zydeco is seeking indications of interest in firm capacity transportation service on a proposed new pipeline from its Houma terminal to St. James.
The larger pipeline is anticipated to replace an existing Zydeco Houma – St. James line to accommodate the demand in excess of the current capacity, which is approximately 270,000 barrels per day with the existing 18” line.
“This new capacity would allow us to better serve our customers by providing a consistent and efficient route for transporting their crude while positioning Houma to grow into a more prominent terminal for increased onshore and offshore supply,” said John Hollowell, Executive Vice President US Pipeline and CEO Shell Midstream Partners. “We are constantly looking for ways to improve our connectivity and capacity in the region so that we can meet future needs in this high demand area.”
The Non-Binding Open Season began today, October 19, 2015 at 10:00AM CST and will continue until December 11, 2015 at 5:00PM CST. This non-binding open season is intended to solicit expressions of interest from potential shippers. If sufficient customer interest is expressed in the Non-Binding Open Season, Zydeco may proceed to a Binding Open Season. The size of the new line and the amount of new capacity are subject to customer input.
Upon completion of the proposed pipeline, customers would have more capacity available to transport crude directly between Houma and St. James. All firm capacity commitments on the new line would incur a small premium to the equivalent spot rate. Pending regulatory approval, construction is expected to be completed in early 2018.