Shell is progressing toward early 2013 completion of the Houston, TX to Houma, LA (Ho-Ho) pipeline reversal. Bakken and Canadian Crude via Cushing, Eagle Ford crude from South Texas and Permian Basin crude from West Texas pipeline projects will all be showing up in the Houston area early next year via new or expanded pipeline projects. The Ho-Ho reversal will provide a missing link for these crudes to flow seamlessly to Louisiana Gulf Coast refineries. Today we describe the Ho-Ho project and its significance.
The map below shows the current Ho-Ho system that flows east to west from Louisiana to Texas. The Houma terminal is connected to the onshore storage and terminal facility at Clovelly that serves the Louisiana Offshore Oil Port (LOOP) as well as several Gulf of Mexico crude production systems. LOOP is a huge floating dock built to handle the largest crude vessels afloat – ultra large crude carriers (ULCC’s) that can carry 2 MMBbl of oil. LOOP can import up to 1 MMBbl/day of crude (about 25 percent of daily Gulf Coast imports). Over 90 MMBbl of crude storage is located between Clovelly and St. James, including the LOOP salt dome caverns. Gulf of Mexico production from the Eugene Island, Poseidon and Heavy Louisiana Sweet (HLS) fields also flows into Houma. From Houma this crude either flows north and east to St. James, LA from where it can be transported north to Chicago on the Capline pipeline or west to refineries in Lake Charles, Port Arthur, Baytown, Houston and Texas City. Refineries in these markets consume over 4 MMb/d of crude.
Source: Shell Open Season Data
The Ho-Ho project reverses the flow of crude from Houston to Houma. Pipeline capacity from East Houston to Nederland (Port Arthur Refineries) will be 250 Mb/d and from Nederland to Houma will be 360 Mb/d. The existing Houma to St. James leg will stay unchanged with capacity of 260 Mb/d. The Houma to Clovelly leg will be reversed with 500 Mb/d capacity.