Shell Midstream Partners, a US-based affiliate of Royal Dutch Shell, on Friday announced plans to cut costs by $10 million in 2020 and up to $40 million in 2021 through laying off jobs and trimming projects as volumes on some of its pipelines fall. CFO Shawn Carsten attributed the decreasing volumes on the continuing effects of COVID-19 and some production curtailments by shallow-water producers.
During the second quarter of 2020, volumes of shipped oil in the company’s Eastern Corridor pipeline fell nearly 23%, while volume at its Zydeco oil pipeline decreased by 20%. Despite the falling volumes, Shell Midstream reported revenue of $120 million, relatively flat from $121 million for the previous quarter.
The company will keep the expansion project at its 262-km Mars crude pipeline which is expected to start operation in 2021. The pipeline currently transports up to 600,000 bpd of crude produced from platforms in the Mississippi Canyon-area in the US Gulf of Mexico to a storage hub in Clovelly, Louisiana. Volumes at this pipeline declined 7% to 501,000 bpd in the second quarter, the company reported.
