Shell restored service to the 18-inch Houma-St. James, Louisiana, segment of its Zydeco system last Friday after shutting it because of a leak identified near its St. James facility early Wednesday (November 13).
All lines are in operation, and clean-up along with restoration are in progress, Shell said in an email. Meanwhile, the Louisiana Department of Environmental Quality said the release occurred on-site, and earthen berms were constructed to prevent offsite migration. There was no offsite impact. Zydeco runs from Houston to St. James, comprising four major segments, each with varying capacities; the largest of which is 375 Mb/d (see Map below).
The Zydeco pipe transports shale crudes like those from the Permian Basin arriving at Houston to markets in the east including Louisiana. It also gets production coming in from Gulf of Mexico fields at Houma, such as medium-sulfur Poseidon crude. St. James is a critical storage and blending hub for grades like Light Louisiana Sweet crude.
WTI prices in Houston stood at $1.50/bbl above Nymex oil futures on November 15, compared with $1.40/bbl premium on November 13, according to market sources. Poseidon prices for the same period were broadly unchanged at $1.05/bbl under U.S. oil futures.
Shipments destined for St. James can still make it to the critical hub. Zydeco barrels that arrive at Houma can flow further east on the system to Clovelly, LA. From there, volumes can get on the 1.2 MMb/d LOCAP system which ends at St. James. Throughput on LOCAP was last estimated at around half a million barrels a day.
