As we step into the new year with record-high U.S. crude oil production and export volumes as strong as ever, there’s a race underway among four offshore export projects that aim to tap into those rising supplies and — with their ability to fully load Very Large Crude Carriers (VLCCs) without any reverse lightering — push export volumes to new heights. While Enterprise Products Partners’ Sea Port Oil Terminal (SPOT) might be leading the development race so far, Energy Transfer’s (ET) Blue Marlin Offshore Port has momentum also. In today’s RBN blog, we update Blue Marlin’s progress, look at the critical role anchor shippers play in project development, and show how growing offshore exports could impact existing onshore terminals.
Canadian crude output is rising, requiring new export routes. As traditional pathways face constraints, the U.S. Rockies—especially the Guernsey, WY hub—are emerging as key corridors for moving Canadian heavy crude to downstream markets, including the Gulf Coast.
Before we look at Blue Marlin and the other potential VLCC-ready projects, let’s see how short-term crude oil production is shaping up and how much of that output is likely to be exported. U.S. producers shipped out a little under 4 MMb/d of crude on average last year from production that averaged around 12.9 MMb/d; RBN’s Mid Case production forecast has it rising to 13.3 Mb/d in 2024 and 13.6 Mb/d in 2025. That could swell crude oil exports to 4.2 Mb/d in 2024 and 4.8 MMb/d in 2025, according to RBN’s Future of Fuels report.
There are four main contenders in the race to build a new offshore oil export terminal: Enterprise’s plan to build the Sea Port Oil Terminal (SPOT), ET’s Blue Marlin Offshore Port (BMOP), Sentinel Midstream’s Texas Gulf Link, and Phillips 66 and Trafigura’s Bluewater Texas Terminal. As noted in the introduction, Enterprise’s SPOT project is the furthest along. The Record of Decision (ROD) approving its deepwater port license was awarded by the U.S. Department of Transportation’s (DOT) Maritime Administration (MARAD) in November 2022, three years after the company submitted its application. When the ROD was issued, it was indicated that MARAD would be working with Enterprise to ensure all remaining conditions were met before the deepwater permit was issued. In its most recent 10-K filing, the company said it expected to meet those conditions, which included routine construction, operating and decommissioning guarantees; submission of public outreach, wetland restoration and volatile organic compound (VOC) monitoring plans; and other state approvals in 2023. But it still hasn’t received its permit. That’s how fraught permitting can get, not to mention the costs it can incur. During its analyst day in March 2023, soon after the ROD was issued, Enterprise revealed that its permitting costs for SPOT had already run past $50 million.
Figure 1. Blue Marlin Offshore Port and Other Gulf Coast Infrastructure. Source: RBN
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About the song
“Deep Water” is a track off country singer George Strait’s 1986 album, 7. "Deep Water" was written by Fred Rose and was first recorded and released by Bob Wills and his Texas Playboys in 1948. George Strait’s 7 LP — his seventh album — reached #1 on the Billboard Top Country Albums chart and #27 on the Billboard Top 200 Albums chart. It produced two #1 hit singles, “Nobody in His Right Mind Would’ve Left Her” and “It Ain’t Cool to Be Crazy About You.” Personnel on the LP were: George Strait (lead vocals and acoustic guitar), Curtis Young (background vocals), Eddie Bayers (drums), David Hungate (bass), Billy Joe Walker (guitar), Reggie Young (guitar), Richard Bennett (guitar), John Jarvis (piano), Johnny Gimble (fiddle and mandolin) and Paul Franklin (steel guitar).
George Strait is an American country music singer, songwriter, actor, and record producer. Many consider Strait the “King of Country Music.” He has sold more than 120 million records worldwide and has 13 multi-Platinum, 33 Platinum, and 38 Gold albums. He started his musical journey playing in a rock-and-roll cover band during his high school years in Pearsall, TX. He started singing country music in an Army-sponsored country band while stationed in Hawaii. After his stint in the Army, Strait enrolled as a student at Texas State University in San Marcos, where he formed the Ace in the Hole Band. After releasing some music on an independent Texas label, he signed his first record deal with MCA Records in Nashville in 1981. He has released 29 studio albums, three live albums, 12 compilation albums, one soundtrack album, and 102 singles. He has appeared in three motion pictures and one television show. He holds the record for most ACM and CMA Awards and is third only to Elvis Presley and The Beatles for the most Gold and Platinum albums. He was inducted into the Country Music Hall of Fame in 2006. Strait has retired from touring, giving the final concert on his The Cowboy Rides Away Tour in Arlington, TX, in June 2014. He still occasionally records and is scheduled to appear at nine stadium shows with Chris Stapleton in 2024, with the first set for May 4 in Indianapolis.
Comments
Stingray has been in service for decades. Over the last 15 years, diminishing gas volumes allowed condensate and water to accumulate in Stingray which required pigging. Since the gas contained modest amounts of CO2, the question is will the pipeline have enough integrity for this repurposing as an oil pipeline?