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Getting Closer, Encore Edition - A Drill Down Report on Four Projects Vying to be Next Deepwater Export Terminal

The four deepwater crude oil export projects under development along the U.S. Gulf Coast are getting closer to receiving their regulatory go-aheads after years of planning and millions of dollars spent. In fact, Enterprise’s Sea Port Oil Terminal (SPOT) received its license in April. These projects have sparked commercial and wider market interest because of the many benefits they may provide — including the ability to fully load 2-MMbbl Very Large Crude Carriers (VLCCs) without any reverse lightering. In today’s RBN blog, we highlight key insights from our new Drill Down Report on the four projects, the potential benefits and the challenges they face. 

In observance of Independence Day, we are giving our analysts a break and replaying a recently published blog on crude oil export terminals. If you didn’t read it then, this is your opportunity to see what you missed!

To say the U.S. crude oil market has undergone a transformation over the last 15 years would be an understatement. The Shale Revolution enabled producers to unlock volumes that were unimaginable to many not long ago, especially in the most prolific U.S. production area: the Permian Basin. As the production of mostly light sweet crude from domestic shale plays grew, U.S. refineries by the mid-2010s were consuming their fill. But even as production kept growing and refineries became satiated, U.S. crude oil exports were largely limited to Canada, causing concern at the time that the Shale Revolution could hit a wall. Then, in December 2015, the Obama administration opened the door for crude exports. Export volumes took off — soaring from less than 500 Mb/d in 2015 to more than 2 MMb/d in 2018 and more than 4 MMb/d in 2023. Despite a recent slowdown, we expect exports to continue growing along with U.S. production throughout the 2020s, propelling market interest for new, efficient export terminals along the Gulf Coast.

U.S. crude exports and the proposed deepwater export terminals are among the many issues to be discussed at RBN’s 18th School of Energy, a two-day immersion in oil, gas, NGL and refined products markets, infrastructure and exports, to be held June 26-27 in Houston.

Production and export growth over the past eight-plus years prompted an unprecedented build-out of crude oil pipelines between production basins and market centers (especially between the Permian and the Gulf Coast — see our Permian pipelines series for more) and fostered the development of several crude export-focused marine terminals from South Texas to Louisiana. Most of these onshore export terminals are along the Texas coast, as are the four prospective offshore terminals, which makes sense, given that their main focus is on exporting the U.S.’s ample volumes of West Texas Intermediate (WTI) or West Texas Light (WTL), with the majority of the volumes delivered straight from the Permian. 

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