It’s been a long road for Enterprise Product Partners’ Sea Port Oil Terminal (SPOT), but it looks like the journey may be coming to an end—at least for now. Despite clearing the highest regulatory hurdles, including receiving its deepwater port license on April 9, 2024, Enterprise has yet to secure the customer commitments needed to justify the massive investment required to bring SPOT to fruition. CEO Jim Teague pointed to a shifting crude export landscape, regulatory delays, and the impact of geopolitical events like Russia’s invasion of Ukraine as key factors in the lack of interest. While the company hasn’t officially pulled the plug, Teague made it clear that without sufficient volumes, fees, and contract terms, SPOT will remain on the shelf.
We forecast that this would happen in our annual Prognostications blog in January. Part of the issue, as we pointed out, is that European refiners have increasingly turned to U.S. crude in the wake of Russia’s displacement from global markets. This shift has favored smaller tankers, reducing the immediate need for SPOT’s ability to fully load VLCCs offshore. With U.S. crude exports averaging around 4.1 MMb/d in the first 11 months of 2024, and with Gulf Coast export capacity already around 7 MMb/d (see our Crude Voyager for details), it’s no surprise that potential offtakers are proceeding with caution.
