Rising crude production in the region and new shipping contracts are meeting expectations to make the project viable, the company said. Shell plans to reverse the pipeline’s flow to carry up to 300,000 barrels of crude per day eastward from East Houston to Port Arthur to Houma, La.
The project seeks to capture growing crude production from the Eagle Ford Shale in South Texas and the Permian Basin in West Texas to supply refiners along the Gulf Coast.
The company said the project’s contract rates and space allocation recently received approval from the Federal Energy Regulatory Commission. However, Shell did not say how much of the Ho-Ho pipeline capacity has been contracted
The company began accepting fuel shippers’ contracts for space on the line in March. Service is expected to begin in early 2013.
Shell Pipeline Company operates thousands of miles of pipelines in seven states and carries about 2 billion barrels of crude, gasoline and other refined fuels annually.