A year ago (April 2015) the price spread between Light Louisiana Sweet (LLS) the St. James, LA benchmark light crude and Permian West Texas Intermediate (WTI) delivered to Houston was roughly $2.50/Bbl. In the first quarter of 2016 – following the end of the crude export ban and the crash of crude prices below $40.bbl – that spread narrowed to 30 cents/Bbl. This price differential change has thrown a wrench into traditional Gulf Coast price relationships that encouraged the flow of crude east from Houston to Louisiana. Further changes are expected as pipeline projects due to be completed in the next two years will deliver Bakken and Permian crude direct to St. James. Today we wrap up our series on St. James with a look at changing crude prices and flows.
In Part 1 of this series we covered how the St. James, LA crude trading hub (located on the Mississippi River 60 miles upriver from New Orleans) provides feedstock to 2.6 MMb/d of regional refining capacity on the Eastern Gulf Coast as well as to refineries in the Midwest. St. James is also an important storage and distribution hub for crude produced in North Dakota, South Texas, the Gulf of Mexico and onshore Louisiana as well as imports arriving at the Louisiana Offshore Oil Port (LOOP). We detailed the 12 refineries that St. James supplies directly in the Gulf Coast region as well as pipeline connections bringing crude into and out of St. James. In Part 2 we reviewed the build out of crude storage at St. James to about 32 MMBbl. The two largest commercial storage players at St. James are NuStar Energy with nearly 10 MMBbl and Plains All American who will have over 12 MMBbl by the end of 2016. Both companies have ship docks and rail unloading facilities as well as pipeline connections to nearby refineries. The other 5 companies with storage capacity at St. James are either pipeline operators or refiners with private tanks used to stage supplies to their refineries. Over the past 5 years as crude production in the South Texas Eagle Ford expanded rapidly (from less than 50 Mb/d in 2010 to 1.6 MMb/d in March 2015) increasing volumes were delivered to Corpus Christi by pipeline, loaded onto barges and tankers and ferried along the Gulf Intracoastal Waterway to destinations in Texas and Louisiana – including St. James.
The Canadian NATGAS Billboard is a weekly, early morning email and report that’s designed to keep physical and financial participants informed of the various fundamental components that make up the complex Canadian natural gas market. This service saves readers time and confusion by compiling all the most critical data points into one clear and concise report.
Join Backstage Pass to Read Full Article
About the song
“I Got You (I Feel Good)” was recorded and released by the “Godfather of Soul “ James Brown (or as we like to call him – “St. James” Brown) in 1965 and peaked at #3 in the Billboard 100 that year.
