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Shell Midstream offshore pipeline flows rise, onshore struggles - company

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By Laila Kearney

NEW YORK, April 30 (Reuters) - Shell Midstream Partners offshore oil pipeline volumes rose by 11% in the three months ended March 31 compared to the previous quarter, but onshore flows continued to struggle from lower demand caused by the coronavirus pandemic, company executives said on Friday.

Volumes on the Mars crude oil pipeline system off the Louisiana coast, which includes its 400,000 barrel-per-day main line, rose to 498,000 barrels per day (bpd) from 441,000 bpd in the last quarter, Shell Midstream said on an earnings call.

The Houston-based affiliate of Royal Dutch Shell and its partners have started acquiring materials to expand the Mars system by about 65,000 bpd and expect the project to be operational next year, Shell Midstream's chief executive officer Steven Ledbetter said on a call with investors.

Onshore, the company's oil pipelines continued to see below normal demand largely due to a decrease in fuel consumption caused by COVID-19, which continues to surge globally.

"We remain optimistic and expect that when demand improves across the U.S., our system throughput will recover as well," Ledbetter said.

Oil volumes on the Zydeco pipeline system, with a 350-mile main pipeline that delivers crude to St. James and Clovelly, Louisiana from terminals in Houston and Nederland, Texas, fell to 659,000 bpd from 697,000 bpd in the three months ended December 31.

Shell Midstream, a co-owner of Zydeco, contracted 75,000 bpd of capacity on its Zydeco oil pipeline, starting May 1 for a 12-month term, giving the line roughly two-thirds of capacity contracted for at least another year, Ledbetter said.

Revenue rose to $139 million in the three months ended March 31 versus $130 million the previous three months, the company said. (Reporting by Laila Kearney; Editing by Kirsten Donovan)