Gibson Energy Boosts South Texas Gateway Terminal Crude Oil Connectivity

As crude oil production in the Permian continues to grow and pipelines from West Texas to the Gulf Coast edge closer to full utilization, it’s becoming a challenge for producers and shippers alike. Amid this capacity crunch, one pipeline stands out as the only one with a detailed expansion plan: the 850-mile, 900-Mb/d Gray Oak Pipeline from West Texas to Corpus Christi and Sweeny, TX, which started up in late 2019 and became fully operational in early 2020. In today’s RBN blog — the latest in our series on Permian crude oil pipelines — we discuss Gray Oak Pipeline’s dynamic story, including its shifting ownership, strategic connectivity and expansion plans. 

Since last summer, the Corpus Christi area has emerged as the U.S.’s leading crude export venue. In the first five and a half months of 2020, it accounted for an astounding 45% of the barrels being shipped abroad — astounding because in the same period last year, the Corpus area held less than a 20% share. What is sometimes forgotten, though, is that little Ingleside, TX, located across Corpus Christi Bay from Corpus proper, is the area’s crude-export leader, with the Moda Midstream and Flint Hills Resources terminals responsible for just over half of Greater Corpus’s total export volumes. And, with the new South Texas Gateway Terminal nearing completion, Ingleside’s role will only increase in the coming months. Today, we conclude a series on Gulf Coast export terminals with a look at what has been going on in Ingleside.

Just a couple of years ago, TC Energy finally threw in the towel on its long-planned, long-delayed Keystone XL pipeline project, which would have substantially increased the flow of Western Canadian heavy crude to Gulf Coast refineries and export docks. It was a bitter loss. Since then, however, two other companies headquartered north of the 49th parallel have assumed leading roles in the U.S. crude oil market or, more specifically, crude exports. First, Enbridge acquired the U.S.’s #1 oil export terminal — now called the Enbridge Ingleside Energy Center (EIEC) — and related assets for US$3 billion and then, on August 1, Gibson Energy announced that it had closed on the US$1.1 billion purchase of the nearby South Texas Gateway (STG), which is #2 in crude export volumes. In today’s RBN blog, we discuss the increasing role of Canada-based midstream companies along the South Texas coast.