The Nederland/Beaumont crude oil hub has been somewhat overshadowed recently by other Gulf Coast crude export hubs despite hosting America’s largest refinery, a handful of export terminals and pipeline links to the prolific Permian Basin. But while plans to build one or more deepwater crude export terminals could mean big changes for the Gulf Coast hubs, the Nederland/Beaumont area isn’t standing still. In today’s RBN blog, we discuss what’s ahead for the region and its emergence as a leader in NGL exports.
Before we dive in, let’s recap what we’ve already said in this series. In Texas Hold ’Em, we examined how pipeline takeaway issues in the Permian — particularly for natural gas, which crude-focused wells in the basin produce in massive volumes — have crept back to the forefront. As drillers know all too well, production growth can only happen if there is sufficient pipeline capacity in place to handle the oil and the accompanying associated gas. Permian crude oil output is currently at 6.3 MMb/d. About 800 Mb/d is either consumed by refineries in West Texas and New Mexico or moves north out of the basin towards the Cushing, OK, storage hub. That leaves about 5.5 MMb/d of supply competing for the 6.4 MMb/d of pipeline capacity to reach the U.S. Gulf Coast — home to half the nation’s refining capacity and all major oil export terminals. So, there is not yet a constraint on barrels exiting the basin overall, but there is a far greater economically driven interest in getting capacity to the Gulf Coast.
The issues surrounding the Permian Basin are among many to be discussed at RBN’s 18th School of Energy, a two-day immersion in oil, gas, NGL and refined products markets, infrastructure and exports, to be held June 26-27 in Houston.
In Corpus Christi Bay we described how two midstream companies are responding to the situation in the Permian with plans to boost capacities of their respective pipelines from the basin to the Corpus/Ingleside area. Most recently, in Houston (Means I’m One Day Closer to You), we examined the latest Permian oil flows to Houston and how they could change if and when one of the deepwater export projects capable of fully loading a Very Large Crude Carrier (VLCC) comes online. In today’s blog, we’ll address what’s in store for the Nederland/Beaumont hub and its nearby Port Arthur refining center.
Figure 1. The Nederland/Beaumont Oil Hub. Source: RBN
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