Daily Blog

It's All Part of a Bigger Plan - The Case for Energy Transfer's Blue Marlin Crude Oil Export Project

It’s been two and a half years since Energy Transfer submitted its plan for the Blue Marlin crude oil export project to the U.S. Maritime Administration (MARAD) and, like the large billfish for which the proposed offshore terminal is named, the project has spent most of its time under the surface and out of sight. But that doesn’t mean there hasn’t been forward movement on the regulatory and business fronts and, with U.S. oil exports rising fast and a preference among many shippers for VLCCs that can be fully loaded without reverse lightering, Blue Marlin is alive and kicking, as we discuss in today’s RBN blog.

Crude oil exports have been a primary focus for RBN this spring as we prepare for our xPortCon-Oil 2023 conference on June 8 in Houston — more on that at the end of this blog — and two of the biggest questions out there are (1) how much will U.S. production and exports increase over the next few years and (2) how are we going to handle those higher volumes. RBN’s middle-of-the-road forecast sees U.S. oil production increasing by about 1.5 MMb/d over the next five years (from today’s 12.3 MMb/d), with three-quarters of that incremental output coming from the Permian and most of the rest from other shale plays that also produce light-sweet crude.

Given that U.S. refineries’ ability to economically process high-API-gravity, low-sulfur crude is pretty much maxed out, it’s likely that almost all those incremental barrels will be bound for export terminals along the Gulf Coast. And, as we said in Calling the Shots, it’s also a good bet that, on their way to overseas refineries, as many of those barrels as physically possible will be headed through terminals like the Enbridge Ingleside Energy Center (EIEC) and South Texas Gateway (STG) — both in Ingleside, across the bay from Corpus Christi — whose docks can receive and load VLCCs with minimal reverse lightering, the most cost-effective way to move massive volumes of oil to Europe and Asia.

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