How Many Export Terminals Does the US Need?
A bottleneck at Texas ports and a surge in the state’s crude production over the last couple of years has led to a growing number of new capital projects that aim to get the product into the world’s biggest tankers—very large crude carriers (VLCCs).
The vessels are capable of carrying up to 2 million bbl of product compared to the 1-million to 500,000-bbl capacity tankers that Texas ports currently accommodate. The restriction is due to the state’s port depths of around 40–45 ft. VLCCs require at least 75 ft depths to be fully loaded.
A flurry of proposed project seeks to remedy the issue either by dredging existing ports or building new offshore terminals. There is currently only one operating offshore terminal—the Louisiana Offshore Oil Port (LOOP)—which was reversed from an import facility to an export facility last year.
The plans to build more of these facilities is being described as a “race” in which there may be only one or two winners. RBN Energy, a Houston-based market research consultancy, noted that if all the projects were to be built they would have a combined export capacity over 10 million B/D—while the US lower 48 only produces about 11.2 million B/D.
In the first week of February, the US averaged about 2.3 million B/D in exports, according to the US Energy Information Agency.
RBN said most analysts expect just one or two of the eight different proposals will come to fruition. According to the firms drafting the export plans, the first of these new facilities could come online as early as next year.
Two would involve quayside docking facilities, while the others are looking to use offshore terminals with buoy loading systems, same as the LOOP. The proposed buoy-terminals would rely on subsea pipelines and could fully load a VLCC within 24–48 hours. If smaller pipelines are ultimately used, the loading time could stretch to 4–5 days.
All but one are to be located in Texas waters.
Jupiter Offshore Loading Terminal (JOLT)
Who: Jupiter MLP
What: Jupiter plans to construct two pipelines to transport the crude from an onshore storage site capable of holding 10 million bbl. The offshore system would be located about 6 miles off the coast of Brownsville, Texas.
When: Expected to begin operations in 2020.
Sea Port Oil Terminal (SPOT)
Who: Enterprise Products Partners
What: An offshore terminal would be located about 31 miles off the coast of Galveston, Texas, and would likely be linked to Enterprise’s existing storage facilities in the Houston area.
When: Expected to begin operations in 2022.
Who: Magellan Midstream Partners
What: The terminal would be in relatively close proximity to the Harbor Island Terminal and would also involve the construction of two VLCC loading docks and storage tanks. Crude would be transported via a proposed $2-billion pipeline.
When: Not announced.
Who: Sentinel Midstream Holdings
What: The proposal is to build an offshore platform with two mooring buoys for crude loading and a storage facility for 18 million bbl. The facility would be located near Freeport, Texas.
When: Not announced.
India Looking To Store Oil in the US Petroleum Reserve
India may be the second country to lease space in the US SPR. Capacity at the SPR has been building for the past 5 weeks.
Premier Recasts First Oil for Tolmount, Seeks Acquisition Deal with BP
North Sea system now on track for completion in Q2 2021.
Natural Gas Markets Remain Regionalized
Historically, natural gas contract prices were tied to the price of crude; now, volatility and growth in spot-market liquidity signal a shift from long-term linking toward a more integrated market.
Don't miss out on the latest technology delivered to your email every two weeks. Sign up for the OGF newsletter. If you are not logged in, you will receive a confirmation email that you will need to click on to confirm you want to receive the newsletter.
20 May 2020
20 May 2020