It's All Part of a Bigger Plan - The Case for Energy Transfer's Blue Marlin Crude Oil Export Project

It’s been two and a half years since Energy Transfer submitted its plan for the Blue Marlin crude oil export project to the U.S. Maritime Administration (MARAD) and, like the large billfish for which the proposed offshore terminal is named, the project has spent most of its time under the surface and out of sight. But that doesn’t mean there hasn’t been forward movement on the regulatory and business fronts and, with U.S. oil exports rising fast and a preference among many shippers for VLCCs that can be fully loaded without reverse lightering, Blue Marlin is alive and kicking, as we discuss in today’s RBN blog.

Crude oil exports have been a primary focus for RBN this spring as we prepare for our xPortCon-Oil 2023 conference on June 8 in Houston — more on that at the end of this blog — and two of the biggest questions out there are (1) how much will U.S. production and exports increase over the next few years and (2) how are we going to handle those higher volumes. RBN’s middle-of-the-road forecast sees U.S. oil production increasing by about 1.5 MMb/d over the next five years (from today’s 12.3 MMb/d), with three-quarters of that incremental output coming from the Permian and most of the rest from other shale plays that also produce light-sweet crude.

Given that U.S. refineries’ ability to economically process high-API-gravity, low-sulfur crude is pretty much maxed out, it’s likely that almost all those incremental barrels will be bound for export terminals along the Gulf Coast. And, as we said in Calling the Shots, it’s also a good bet that, on their way to overseas refineries, as many of those barrels as physically possible will be headed through terminals like the Enbridge Ingleside Energy Center (EIEC) and South Texas Gateway (STG) — both in Ingleside, across the bay from Corpus Christi — whose docks can receive and load VLCCs with minimal reverse lightering, the most cost-effective way to move massive volumes of oil to Europe and Asia.

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About the song

“It’s All Part of a Bigger Plan” was written by Diplo and appears as the 11th song on Diplo‘s debut studio album, Florida. The short song (less than two minutes long) features bongos, marching drums, a Hammond B3 organ, what sounds like voices at a children’s playground, and the recitation of “D-I-P-L-O, this is all a part of a bigger plan, Diplo.” Diplo did all the sampling and mixing.

Florida is the debut studio album from the American DJ known as Diplo. It was released on the Big Dada label in September 2004. Tim O’Neil of PopMatters said, “Diplo has crafted one of the year’s best debut albums, an ambitious ode to the art and craft of sampling.” In 2014 the LP was re-released as F10rida, with 10 extra tracks added.

Diplo (Thomas Wesley Pentz) is an American DJ and music producer. He is a member of the groups Major Lazer, LSD, Jack U, and Silk City. He founded and manages the record label Mad Decent. Diplo has worked with artists M.I.A., Gwen Stefani, Britney Spears, Madonna, Beyonce, Snoop Dog, Bad Bunny, and Justin Bieber. “Where Are U Now,” with Skrillex, Diplo and Justin Bieber, was released in March 2015, and went to #8 on the Billboard Hot 100 Singles chart. He has released five studio albums, one live album, six compilation albums, 10 EPs, and 41 singles. Diplo won a Grammy Award for Best Dance Recording in 2019 with “Electricity.” He continues to record and do concerts and started a summer tour this month.

Comments

May 16, 2023 - 09:05 - Frank Wick

Stingray Pipeline was an old pipeline in undehdrated gas service with 1-2% CO2 content and condensate, so it's had a few leaks over the years. Energy Transfer will have to do a thourough job of inspecting the pipeline and replacing sections as needed to make a robust oil export line.

Blue Marlin Blues - Can a Low-Cost Offshore Crude Export Terminal Hook Shippers?

Author Housley Carr

U.S. crude oil exports are off from the record highs they reached earlier this year, leaving the Gulf Coast even more flush with surplus export capacity than it had been going into 2020. And yet … Energy Transfer is developing an crude export terminal off the coast of Beaumont, TX, that would be capable of fully loading a 2-MMbbl VLCC every day or so. Is the company’s Blue Marlin project based simply on a hunch that U.S. oil production and exports will rebound over time and eventually leave PADD 3 short of dock and ship-loading capacity? Or is Energy Transfer’s proposed offshore terminal, with its extensive re-use of existing infrastructure, a cost-efficient way of giving oil-sands, Bakken and other producers more direct access to deep water and the supertankers that long-distance shippers prefer? Today, we discuss what may be behind the seemingly long-shot effort to develop new export capacity in a region that’s already got way too much.

Tue 6/6/23 - Blog

Crude Oil

(Gulf) Deep, Mountain High - The Race to Build Texas's First Offshore Crude Export Terminal

Author Housley Carr

As we see it, 2023 will be another strong year for U.S. crude oil exports, driven in large part by rising domestic production. Upstream companies in the Permian and other U.S. shale plays are gradually ramping up their output and, with domestic refineries largely maxed out on how much light-sweet oil they can use, it’s safe to say that the vast majority of the incremental oil produced will end up at export terminals along the Gulf Coast. And if production continues growing (as we expect), there’s likely to be room — and a strong economic rationale — for one or more new offshore terminals to be built in the deep waters of the Gulf itself. Each of these proposed facilities would offer shippers what they want most: easy access to large volumes of oil and the ability to fully load 2-MMbbl VLCCs without any reverse lightering, which brings cheaper and cleaner export options to the market. In today’s RBN blog, we provide updates on two offshore projects still in the running: Sentinel Midstream’s Texas GulfLink and Phillips 66 and Trafigura’s Bluewater Texas.

Mon 5/20/24 - Blog

Crude Oil

Different 'Round Here - Energy Transfer Takes Unconventional Approach With Blue Marlin Project

Author Taylor Noland

Energy Transfer, which is championing its Blue Marlin Offshore Platform (BMOP), may have been the last developer to pursue its critical deepwater export license, but that doesn’t mean it’s out of the hunt. Of the four offshore crude oil export projects, BMOP stands out as the sole brownfield initiative, which should hold down costs and expedite its construction timeline. Further, a recent non-binding agreement with TotalEnergies underscores the industry’s interest in this unusual but compelling facility. In today’s RBN blog, we explore Energy Transfer’s unconventional approach.

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