Europe’s oil major Royal Dutch Shell plc (RDS.A - Free Report) commenced operation after completing the reversal of its Houston-to-Houma pipeline, as per a report from Reuters. This marks the completion of the second phase of the Ho-Ho pipeline project.
The flow reversal took place at the 360,000 barrels per day (bpd) capacity pipeline from Port Neches, Texas to Houma, Louisiana. The pipeline from Houma to Louisiana Offshore Oil Port hub in Clovelly has a capacity of 500,000 bpd. Another segment from the Houma terminal to St. James will transport crude at 300,000 bpd.
Originally, the pipeline carried crude from Louisiana to Texas. The reversed pipeline transports crude from the inland oil rich plays in Eagle Ford and Bakken, providing cheaper crude access to the U.S. Gulf Coast refineries.
According to the Reuters article, pumping stations are expected to be installed in Channelview and Port Neches in Texas as two more phases of the Ho-Ho project come online. The new phases are estimated to add 50,000 bpd to the Houston-to-Port Neches portion of the pipeline and 15,000 bpd to the Port Neches-to-Houma stretch by early 2014.
U.K.-based Shell is the largest oil company in Europe. Moreover, the company has operations worldwide and is involved in various activities related to oil and natural gas, chemicals, power generation, renewable energy resources, and other energy related businesses.
Royal Dutch Shell currently holds a Zacks Rank #4 (Sell), implying that it is expected to underperform the broader U.S. equity market over the next one to three months.
Meanwhile, one can consider better-ranked energy sector stocks such as Abraxas Petroleum Corp. (AXAS - Free Report) , Clayton Williams Energy, Inc. and Harvest Natural Resources Inc. . All these stocks presently sport a Zacks Rank #1 (Strong Buy).