How Much More Can She Stand, Part 5 - LOOP's Unicorn Status Among Crude Export Terminals

Very Large Crude Carriers offer economies of scale and are the oil transporters of choice for shippers moving massive volumes of crude from the U.S. Gulf Coast to distant customers in Europe and Asia. VLCCs also can serve as cost-effective floating storage — in the current contango market, a growing number of these 2-MMbbl behemoths are being used to stockpile crude until its value increases in the coming months. VLCCs can be loaded to the gills through reverse lightering at a number of deepwater points off the coast of Texas, but only one facility, the Louisiana Offshore Oil Port, can fill the supertankers to the brim at the port itself. LOOP also can receive fully loaded VLCCs, of course, and another ace up its sleeve is its 72 MMbbl of cavern and tank storage a few miles inland at Clovelly, LA. Today, we continue our series on Gulf Coast export facilities with a look at LOOP.

Amid all the energy market craziness of the past couple of months, at least one thing has held steady: U.S. crude oil exports. Last week, export volumes averaged 2.94 MMb/d, or just a hair under the 3.05-MMb/d year-to-date average, according to RBN’s Crude Voyager report. With refinery demand for crude oil off sharply, crude production plummeting and storage space filling up, loading crude into tankers is playing an important role in keeping the broader crude oil market in balance — even if many of those oil-laden VLCCs, Suezmaxes and Aframaxes soon drop anchor in the Gulf of Mexico rather than sailing to foreign ports. Whether crude export volumes rise or fall in the coming months is an open question.

In Part 1 of this series, we looked at the Seaway Freeport and Seaway Texas City terminals, both of which are part of Enterprise Products Partners and Enbridge’s broader Seaway Crude Pipeline (SCP) system. We estimate Seaway Freeport’s export capacity at 200 Mb/d and Seaway Texas City’s at 300 Mb/d. 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. We estimate HFOT’s export capacity at 480 Mb/d, and Seabrook Logistics’ at 300 Mb/d. Then, in Part 3, we examined Enterprise Hydrocarbon Terminal, or EHT, which is one of the largest energy-related marine terminals on the Gulf Coast; it also is a major LPG export facility. EHT’s peak observed crude-loading capacity, on a monthly basis, is 600 Mb/d; however, RBN’s crude export capacity model suggests the terminal’s capacity could be several hundred thousand barrels a day higher. Last time, in Part 4, our focus was the three crude export terminals in the Beaumont/Nederland, TX, area. We estimate the sustainable throughput capacity of Energy Transfer’s Nederland Terminal to be 700 Mb/d, and put Phillips 66’s Beaumont Terminal and Enterprise’s Beaumont Marine West Terminal’s capacities at 420 Mb/d and 210 Mb/d, respectively.