Shell to shut-in portions of Louisiana Zydeco oil pipeline for maintenance

By Arathy Somasekhar

HOUSTON (Reuters) -Oil major Shell on Monday said it plans to shut-in different portions of its Zydeco pipeline system for maintenance for three to four days starting Sept 24, limiting flows of some light crude to Louisiana.

The Zydeco pipeline system, which spans over 350 miles (563.27 km) and has a mainline capacity of about 375,000 barrels per day, has four segments and ships crude oil from Houston, Texas to St. James, Louisiana.

The system alleviates transportation bottlenecks of crude arriving in Houston from the Eagle Ford, Permian and Bakken regions, according to Shell Midstream Partners' website.

The pipeline shut-in will reduce the amount of light crude, such as Bakken crude, West Texas Light and West Texas Intermediate (WTI) supplied into Louisiana, where it becomes a part of the Light Louisiana Sweet blend.

Light Louisiana Sweet's premium to WTI crude has largely remained narrow in recent days. It strengthened to an about $1.38 premium per barrel to U.S. crude on Friday.

The pipeline also moves Poseidon crude from Houma, on the Louisiana coast, inland to the St. James crude hub that serves pipeline connecting to several oil refineries. The grade traded at a $2.25 a barrel discount to WTI on Friday.

(Reporting by Arathy Somasekhar in Houston; editing by Gary McWilliams)