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Shell restarts Ike-damaged pipeline; Poseidon down

03.02.09, 12:47 PM EST

HOUSTON, March 1 (Reuters) – The Auger pipeline segment damaged by Hurricane Ike in the U.S. Gulf of Mexico last September returned to service over the weekend, a Shell official said Monday.

The restart had been scheduled Saturday and took place as planned, said Tom Gates, oil movements manager for Shell Pipeline Co LP.

At the same time, a section of Poseidon pipeline which had been reversed to ease the impact of the Auger shutdown was closed for a few days of maintenance prior to return to normal operation, Poseidon Oil Pipeline Co LLC said.

Poseidon pipeline is expected to return to normal when the work is finished ‘on or before’ March 10, the company website said.

The moves could affect prices for Bonito, Eugene Island and Poseidon cash crude grades, but there appeared to be little impact in trading early Monday, traders said.

During the temporary reversal of Poseidon pipeline, Auger mixed into Poseidon grade, lightening its gravity and sweetening its sulfur content, thereby raising its price differential to West Texas Intermediate, market watchers said.

Eugene Island and Bonito crudes virtually disappeared from the market for a period of time after Ike struck in September, damaging several offshore facilities.

The Auger system has a capacity to carry more than 100,000 barrels of oil and 415 million cubic feet of natural gas per day, Shell said.

Poseidon system, a large part of which remains in operation despite reversal of a section, is capable of carrying between 200,000 and 300,000 barrels per day, officials said.

Poseidon is owned by Enterprise Products Partners LP(nyse: EPD – news – people ) , Shell Oil Products US andMarathon Oil (nyse: MRO – news – people ) Corp .

(Reporting by Bruce Nichols)

((Email: [email protected]; +1 713 210 8510; Reuters Messaging: [email protected])) Keywords: MARKETS USCRUDE/PIPELINES




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