U.S. crude oil production is off its historic highs, the rig count is in free-fall, and crude inventories are rising fast, with the Cushing-to-Magellan East Houston price differential drawing oil away from the Gulf Coast and to the Oklahoma storage hub. Oh, and global demand for crude is off by more than 20%. None of this bodes well for U.S. crude exports, which have been at or near record levels the past few months. What seems to be shaping up is a fierce competition among the owners of existing export terminals to offer the most efficient, lowest-cost access to the water. Today, we continue our series with a look at Enterprise Products Partners’ Houston-area crude oil storage, pipelines and docks.
When we decided a couple of months ago to take a fresh look at crude export terminals along the Gulf Coast, the market’s concern was that additional loading and dock capacity would be needed soon to keep pace with what had been soaring export volumes. In the first two months of 2020, crude exports from Texas and Louisiana marine terminals averaged 3.2 MMb/d, or nearly 1 MMb/d more than in January/February last year. The expectation was that U.S. crude export volumes would continue rising, probably to at least 5 MMb/d in 2022 and maybe 6 MMb/d in 2024; in response, a number of midstream companies were scrambling to advance offshore facilities capable of fully loading Very Large Crude Carriers (VLCCs). But that was before COVID-19 became a pandemic, and before the OPEC+ alliance collapsed and West Texas Intermediate (WTI) prices fell below $25/bbl. In this new, scarier environment — even with a new agreement by the Saudis, the Russians and others to reduce crude production — the outlook for crude exports is far less clear; in fact, existing marine terminals along the Gulf Coast may well be battling for barrels.
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.
In Part 1 of this series, we began our review with a look at the Seaway Freeport and Seaway Texas City terminals, both of which are part of Enterprise and Enbridge’s broader Seaway Crude Pipeline (SCP) system. Seaway is a ~500-mile, 950-Mb/d pipeline system that runs from Cushing to SCP’s Jones Creek terminal, which has 2.8 MMbbl of storage capacity and pipe connections to SCP’s Freeport and Texas City facilities. We estimate Seaway Freeport’s export capacity at 200 Mb/d and Seaway Texas City’s at 300 Mb/d. (An aside: Enterprise said in a regulatory filing on Monday that it planned to offer temporary northbound service on a pipeline from Katy, TX, to Cushing to help address demand by shippers to move crude to the Oklahoma hub. Enterprise didn’t name the pipe, but we think it’s one of the two pipes that make up the Seaway system.)
In Part 2, we discussed the Houston Fuel Oil Terminal (HFOT), which is now owned by Energy Transfer, and the Seabrook Logistics Marine Terminal, which is jointly owned by Magellan Midstream Partners and LBT Tank Terminals. HFOT has 7 MMbbl of crude storage capacity and 11 MMbbl of storage for residual fuel oil, as well as five ship docks and plans for a sixth. We estimate the terminal’s export capacity at 480 Mb/d. Seabrook Logistics, in turn, has 3.2 MMbbl of crude storage and one dock, with plans to add another 750 MMbbl of storage and a second dock. We estimate Seabrook Logistics’ current export capacity at 300 Mb/d.
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About the song
"How Much More Can She Stand" was written by Harry Compton, and was the first single released from Conway Twitty's 1971 album of the same name. The song also appears on the 1973 release, Conway Twitty’s Greatest Hits, Volume I. "How Much More Can She Stand" was recorded at Bradley's Barn in Mt. Juliet, TN, in February 1971, and produced by Owen Bradley. Released as a single in March 1971, the song went to #1 on the Billboard Hot Country Songs Singles chart. It would become Twitty's sixth #1 solo hit single. Personnel on the record were: Conway Twitty (lead vocals), Joe E. Lewis (background vocals), The Jordanaires (background vocals), Harold Bradley (electric six-string bass), Grady Martin (electric guitar), Larry Butler (piano), Jimmy Capps (acoustic guitar), John Hughey (steel guitar), Tommy Markham (drums, percussion), Bob Moore (bass), and Herman Wade (electric guitar).
Conway Twitty (Harold Lloyd Jenkins) was an American country music singer; he also left his mark in the rockabilly, rhythm and blues, and pop genres. Besides his solo work, Twitty had several hits with his duet recordings with Loretta Lynn. As a solo artist, he released 58 studio albums, 20 compilation albums, and 99 singles. With Loretta Lynn, he released 10 studio albums, seven compilation albums, and 13 singles. Twitty has sold more than 50 million records worldwide. He won seven Academy of Country Music Awards, four Country Music Association Awards, and two Grammy Awards, and is a member of the Country Music Hall of Fame and the Rockabilly Hall of Fame. Twitty had just inked a deal to open a new theater in Branson, MO, the day before his death in June 1993. He was 59 years old.
