Zydeco pipeline to restart 26 May: US Coast Guard

Shell's 250,000 b/d Zydeco crude pipeline is expected to restart on 26 May, after being shut for nearly one month following an oil spill, according to the US Coast Guard.

The pipeline — which is a key conduit for sweet crude shipped from the Houston area to Louisiana — has been offline since 25 April after an oil spill was detected by a regular air patrol.

Excavation of the underwater section of pipe that leaked is nearly complete, the Coast Guard told Argus. Next a barrier will be placed around the section of pipe so it can be exposed and repaired.

Light Louisiana Sweet (LLS) prices for June delivery have risen compared with Nymex-quality WTI by roughly $1/bl since the pipeline shut, to a $2.70/bl premium yesterday.

LLS is comprised in part by crude from the Houston area, which is blended to create LLS. The Zydeco outage would reduce the amount of supply delivered to Louisiana.

By Scott Phillips