Race is on to build Texas’ first offshore oil export terminal

[thackney]

Race is on to build Texas’ first offshore oil export terminal
https://www.chron.com/business/energy/article/Race-is-on-to-build-Texas-first-offshore-oil-13130937.php
August 6, 2018

The race is on to build Texas’ first offshore oil-exporting terminal that could accommodate the world’s largest crude-carrying vessels.

The global commodities trading firm Trafigura Group will announce Monday that it plans to build the Texas Gulf Terminals Project in the Gulf of Mexico, off the coast from Corpus Christi. An offshore terminal would avoid port traffic and float in waters deep enough to handle the largest ships. Trafigura is unveiling the project almost three weeks after the Houston energy company Enterprise Products Partners said it plans to build an even larger offshore oil exporting terminal south of Galveston.

orpus Christi and the Houston Ship Channel have led the nation in oil exports ever since Congress lifted the nation’s decades-old crude export ban at the end of 2015. The timing coincided with a boom in U.S. oil production, especially in West Texas’ Permian Basin, pushing crude volumes to record highs this summer. More of that oil is exported because domestic consumption remains relatively flat.

Just as there’s a rush to build pipelines hundreds of miles from the Permian to port and refining hubs near Houston and Corpus Christi, there’s also competition to construct oil exporting terminals to ship out the crude. The Port of Corpus Christi is expanding to handle the flood of oil, and several companies along the Houston Ship Channel are expanding terminals.

But the ports still aren’t able to handle the largest oil tankers, known as very large crude carriers, or VLCCs. Despite ongoing dredging efforts, the channels at Texas ports aren’t deep enough for the giant ships to leave the ports filled to capacity. Very large crude carriers can only fill up partially at Texas ports, and then receive the remaining oil volumes from another ship in deeper waters. It’s a more time-consuming and expensive process....

[thackney]

https://www.caller.com/story/news/local/2018/08/06/offshore-oil-export-facility-could-circumvent-port-corpus-christi/913729002/

...The port is in the midst of widening and deepening the Corpus Christi Ship Channel, which will deepen it to 54 feet and allow for two-way traffic. The $327 million project is a joint venture between the U.S. Army Corps of Engineers and the port, with the federal government expected to pick up the lion's share of the cost.

While the expansion of its ship channel will allow for a greater volume and variety of goods going through the port, it will not be deep enough to fully accommodate VLCCs. The vessels could be partially loaded in the channel, then the rest of the crude would be ferried out to the carrier in the Gulf of Mexico, which results in added expenses.

The port has instead sought to deepen a portion of the ship channel further, from the entrance to the La Quinta Junction, to 75 feet in order to fully load VLCCs. Sean Strawbridge, CEO of the Port of Corpus Christi, has previously said that the port was opposed to an offshore buoy system like what Trafigura is proposing for environmental and security reasons....

[thackney]

https://www.bizjournals.com/houston/news/2018/07/18/enterprise-to-develop-crude-oil-export-terminal.html

...Enterprise has started front-end engineering and design (“FEED”) and preparing applications for regulatory permitting. Based on initial designs, the project could include approximately 80 miles of 42-inch diameter pipeline to an offshore terminal capable of loading and exporting crude oil at approximately 85,000 barrels per hour.

Today, Enterprise is completing the second partial loading of a VLCC tanker at its jointly owned Seaway marine terminal in Texas City. The Eagle Victoria is loading approximately 1.1 million barrels of crude oil at the Texas City facility.

“On the heels of our second successful loading of a VLCC at the Texas City terminal, we are now planning to expand our capabilities to load crude oil faster and more cost efficiently without the need for lightering vessels,” said A.J. “Jim” Teague, chief executive officer of Enterprise’s general partner. “Given the long-term outlook for growing supplies of U.S. crude oil production, increasing global demand requiring super tankers, and the future limitations of Gulf Coast port and lightering capacities, we are confident this project will be embraced and supported by both domestic and international customers. In addition to our best in class reliability, Enterprise’s crude oil supply aggregation capabilities of over 4 million barrels per day, including from the Permian, Cushing, Eagle Ford and numerous third party connections, provide unmatched diversification, supply and quality optionality for international markets.”...

[IsailedawayfromFR]

This is only good news.

Ironic since my early days almost 50 years ago that we were reading about a deepwater port along the Texas coast for importing crude.

Always better to export.