The Houston crude oil hub has become busier over the last few months, and if one or more proposals to build a deepwater export terminal nearby capable of fully loading a Very Large Crude Carrier (VLCC) cross the finish line, it could become the hub supplying them. That could push Permian Basin oil flows on Houston-bound pipelines higher at the expense of flows to Nederland and Corpus Christi. In today’s RBN blog, the third in a series, we will examine the latest Permian oil flows to Houston and how that could change if and when a deepwater project comes online.
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Before we dive in, let’s revisit some of the key points in the previous blogs in this series. As we detailed in our first blog, Texas Hold ’Em, crude oil output in the Permian is now averaging 6.3 MMb/d, up about 600 Mb/d from year-ago levels and 800 Mb/d from May 2022. While there is still sufficient capacity for crude to exit the basin, capacity on pipelines that reach the U.S. Gulf Coast (USGC) — the most desirable market since it’s home to half the nation’s refining capacity and nearly all export terminals — is around 6.4 MMb/d. That’s not much higher than current Permian production. And as the most economic routes fill up, Permian crude will increasingly move along less-economic routes to less-desirable markets.
Next, in Corpus Christi Bay, we turned our attention to the Corpus Christi market. Permian pipelines serving the hub are running nearly at capacity and that explains why two midstream companies — Enbridge and EPIC Midstream — are responding with plans to boost the capacities of their respective pipelines from the Permian to refineries and export terminals in the Corpus area. But, as with Houston, the situation is complicated because potential shippers may be wary of the possibility that one or more deepwater export facilities will advance to commercial operations. In that blog we discussed how these projects could reroute flows and impact Corpus Christi. Today, we’ll address what’s in store for Houston.
Figure 1. U.S. Gulf Coast Crude Oil Export Terminals. Source: RBN
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About the song
“Houston (Means I’m One Day Closer to You)” was written by Larry Gatlin and appears as the first song on side one of Larry Gatlin & The Gatlin Brothers’ fifth studio album, Houston to Denver. The song was recorded before the rest of the album and produced by Larry Gatlin. Released as the first single from the album in September 1983, it went to #1 on the Billboard Hot Country Songs Singles chart. Larry Gatlin had originally called the song “Cheyenne” but changed it to “Houston” and gave the tune a Texas swing feel so the Gatlins could debut it at the Houston Livestock Show & Rodeo they were headlining. Larry Gatlin had attended college at the University of Houston on a football scholarship as a wide receiver. Personnel on the record were: Larry Gatlin (lead vocals, rhythm guitar), Steve and Rudy Gatlin (backing vocals), Billy Sanford, Leon Rhodes (lead guitar), Buddy Emmons (pedal steel guitar), Buddy Spicher (fiddle), Bob Moore (bass), Mitch Humphries (keyboards) and Larrie Londin (drums).
Houston to Denver was recorded in late 1983 and early 1984 at Fame Recording Studios in Muscle Shoals, AL, with Rick Hall producing. Released in March 1984, it went to #9 on the Billboard Country Albums chart. Three singles were released from the LP.
Larry Gatlin is an American country and Southern gospel singer and songwriter. As a member of The Gatlin Brothers with his two younger brothers, Steve and Rudy, and as a solo artist, he has had 33 Top 40 country singles. After meeting Gatlin in Las Vegas, country singer Dottie West recorded two of his songs and helped him get work in Nashville. He signed his first record deal with Monument Records in 1973. He has released 22 studio albums, two live albums, nine compilation albums and 51 singles. In December 1992, The Gatlin Brothers started their farewell tour before retiring to their theater in Myrtle Beach, SC. Since 2010, Larry Gatlin has been a social and political commentator for Fox News. The Gatlin Brothers released two singles in 2023: “Fair Winds” and “Amazing (What the Right 3 Minutes Can Do).”
