Sign Up for FREE Daily Energy News
  • Stay Connected
  • linkedin
  • twitter
  • facebook
  • youtube2

Copper Tip Energy Services
Hazloc Heaters
Hazloc Heaters
Copper Tip Energy

U.S. Oil Export Race Accelerates Even as One Project Makes Leap

English Español 简体中文 हिन्दी Português
These translations are done via Google Translate
(Bloomberg) The race to develop oil terminals that can fully load supertankers on the U.S. Gulf Coast remains congested, even as one of North America’s largest pipeline operators decided to push its project ahead.Over a year, more than 10 projects have been proposed for terminals that, combined, will be able to load 8 million barrels a day onto very large crude carriers, or VLCCs. While they all not be needed, the companies planning the facilities continue to move forward.Enterprise Products Partners LP was first to announce a final investment decision on its Sea Port Oil Terminal late last month, and last week the company said it expects to receive regulatory approval in the first half of 2020, followed by two years of construction. In the meantime, Energy Transfer LP said last week it was advancing talks on its terminal and Tallgrass Energy LP is holding discussions on its project.“I’d say the race is still on,” said Kurt Barrow, vice president of oil markets, midstream and downstream energy at IHS Markit. “Just because one company pulls ahead earlier in the race, doesn’t mean that they will be the first one over the finish line.”The new terminals should help propel U.S. crude exports to fresh records as oil continues to flow from American shale patches. Domestic output is forecast to average 13.3 million barrels a day next year, according to the U.S. government, about a million barrels higher than this year’s estimated average.The ports, combined with new pipeline systems, will also help ease bottlenecks that have caused Permian Basin crude to pile up with very few outlets.WTI at Midland, Texas, rose 5 cents to 55 cents a barrel above WTI at Cushing, Oklahoma, Friday, the highest since February, according to data compiled by Bloomberg.

“Of the 10 or so projects that have been announced, not all would be completed, simply because they aren’t needed,” said Sandy Fielden, director of research for Morningstar Inc.

Some, though, will be needed as the Louisiana Offshore Oil Port, or LOOP, is currently the only export facility in the U.S. that can completely fill up these mega-tankers, to ship barrels around the world. LOOP may not play an important role in U.S. crude exports in the long-term, especially if facilities are built in Texas where production zones lie, said John Coleman, an analyst at consultancy Wood Mackenzie.

VLCC Projects

Company Location (approximate) Volume Timing
The Carlyle Group/Port of Corpus Christi Harbor Island, Corpus Christi Bay, Texas N/A Late 2020
Trafigura ~13 miles off Corpus Christi, Texas 1.44m b/d In 2021
Enterprise Products ~35 miles off the coast of Freeport, Texas 2m b/d N/A
Tallgrass/Drexel Near mouth of Mississippi River N/A By 3Q 2021
Buckeye/Phillips 66/Marathon Ingleside, Texas N/A By
Enbridge/Oiltanking ~30 miles off Freeport, Texas 2m b/d N/A
Sentinel Midstream ~30 miles off Freeport, Texas N/A N/A
Phillips 66 Outer Continental Shelf Matagorda Island Area TX4 lease blocks 698 and 699 1.92m b/d N/A
Jupiter ~6 miles offshore of Brownsville, Texas ~1m b/d 2H 2021
Energy Transfer Off the Gulf Coast connecting to Nederland facility N/A N/A
*Flint Hills Resources Ingleside, Texas N/A N/A
*Project to enable existing facility to handle VLCCs

It’s not so easy to complete projects. Several have already faced regulatory hurdles this year. The U.S. Coast Guard and Maritime Administration suspended the review process for both Enbridge Inc.’s and Enterprise’s port applications. Officials also delayed the review process for Trafigura Group Ltd.’s Texas Gulf Terminals.

Jupiter Energy Group pushed the startup of its terminal, which is backed by private equity firm Apollo Global Management, by a year because it hasn’t secured base shippers or approvals from the Port of Brownsville, according to Jupiter Energy Group CEO Tom Ramsey.


Only five projects are in the permitting process — those planned by Enterprise, Enbridge/Oiltanking, Trafigura, Phillips 66 and Sentinel Energy Services Inc., according to the Maritime Administration.


Sufficient export infrastructure must be built along the Texas Gulf Coast, said a Texas Gulf Terminals representative.

A Phillips 66 spokesman said the company’s plans have not changed, a Flint Hills Resources LLC spokesman said it continues to advance its project and Port of Corpus Christi officials were not immediately available for comment.

“In our view, there is not going to be one winner in this race. There is room in this market to support two to three total VLCC terminals and that won’t include LOOP,” said Coleman.

Share This:

More News Articles