Zydeco Announces Non-Binding Open Season on New Pipeline
Zydeco Pipeline Company, LLC announced today a Non-Binding Open Season for a potential new pipeline routed from the Houma Terminal to St. James, LA. The new pipeline could replace the current Houma-St. James line to meet higher capacity demand, pending customer interest gauged in the Open Season.
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.
Questions and Answers
Why did Shell form Zydeco Pipeline Company LLC?
The Zydeco Pipeline, formerly known as the Shell Pipeline Company LP’s (SPLC) “Ho-Ho” system, has been carved out of SPLC assets and is now a joint venture with Shell Midstream Partners (SHLX).
Is Zydeco Pipeline Company LLC a part of the new MLP (Shell Midstream Partners)?
Yes, Shell Midstream Partners has a 62.5% ownership interest in Zydeco.
Will this affect the current rates on the 18” Houma-St. James pipeline?
No, the spot rate on the retired 18” line will transfer to the new, larger replacement pipe. The new pipeline offering will, however, include a small premium to the current spot rate for firm capacity commitments.
Why are you building a pipeline with the same route as an existing pipe?
Zydeco is committed to meeting its customer demand. Replacing the 18” line with a larger alternative, we will be able to meet current route demand as well as prepare for any increased future needs to St. James from Houma.
What additional opportunities are you reviewing to enhance pipeline capacity and improve flow on the Zydeco pipeline? Are you updating any terminals to accommodate the higher flow capacity?
Zydeco is looking into options that will expand the Houma terminal to allow for more capacity to meet the high demands in this region..
Where can we find the Zydeco rates?
Zydeco is a FERC regulated system. Zydeco’s tariffs can be found at http://etariff.ferc.gov/TariffBrowser.aspx?tid=1464 or http://tariffs.shellpipeline.com/
Who do I contact for more information or to submit a commitment?
Ken Edmonds, SPLC Business Opportunity Manager
Office phone 713-241-5025
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Shell Media Line: 713-241-4544
About Zydeco Pipeline Company LLC
Zydeco Pipeline Company is jointly owned by Shell Pipeline Company LP (SPLC) and Shell Midstream Partners (NYSE: SHLX). Zydeco’s Houston to Houma oil pipeline system (sometimes called “Ho-Ho”) runs from Houston, Texas, to market hubs in St. James and Clovelly, Louisiana. It provides US Gulf Coast refineries and terminals with pipeline access to additional sources of growing light crude oil production arriving in the Houston market from the Eagle Ford shale, Permian Basin, and Bakken shale and to offshore production landing in Houma, Louisiana.
About Shell Pipeline Company LP
For more than 95 years, Shell Pipeline Company LP has helped meet America’s energy needs. We transport more than 1.5 billion barrels of crude oil and refined products annually through thousands of miles of pipelines located in five states.
About Shell Midstream Partners, L.P.L.
Shell Midstream Partners is a fee-based, growth-oriented master limited partnership formed by Royal Dutch Shell to own, operate, develop and acquire pipelines and other midstream assets. Shell Midstream Partners' assets consist of interests in entities that own crude oil and refined products pipelines serving as key infrastructure to transport growing onshore and offshore crude oil production to Gulf Coast refining markets and to deliver refined products from those markets to major demand centers.