Keep on Loving You - LOOP Retains Its Niche Amid Proposed Offshore Crude Export Terminals

As four proposed crude export terminals off the coast of Texas navigate the long and winding regulatory path toward potential construction, the Louisiana Offshore Oil Port (LOOP) already does what they want to do. It’s the sole Gulf Coast terminal that can fully load Very Large Crude Carriers (VLCCs) bound for global markets. LOOP started as an import-only facility, but later flexed to bring oil in and move it out as the energy landscape changed. It’s easy to wonder whether a new offshore crude export facility might be redundant –— why build another one if LOOP could just export more? Turns out it’s not that simple. LOOP is different — in its construction, its connectivity, its role in balancing imports and exports and especially the types of crude it handles. In today’s RBN blog, we’ll examine LOOP’s niche in U.S. crude exports and the role it continues to play. 

We’ve written several blogs over the last few months about the new deepwater crude oil terminals currently being marketed on the U.S. Gulf Coast (check out the series here). While there is excitement about these potential projects — and what impact they may have on the U.S. export market (and pipeline flows out of the Permian) — LOOP, since entering the crude oil export game in 2018, is the only U.S. facility capable of fully loading a VLCC.

LOOP (dark-purple star in Figure 1), located in 115-feet-deep waters 18 miles off Port Fourchon, LA, initiated operations in 1981 as a crude oil import facility and remains a primary recipient of imported crude oil (more on this in a moment). LOOP is connected by the now-bidirectional, 48-inch-diameter LOOP pipeline (dark-purple line) to its huge onshore storage facility in Clovelly, LA, which has more than 70 MMbbl of salt-cavern and aboveground capacity. The Clovelly hub, which also receives crude oil from offshore production in the Gulf of Mexico (GOM), supplies a long list of Louisiana refineries (see refinery icons) through (among others) the 24-inch Clovelly-to-Norco Pipeline (light-blue line) and the 24-inch CAM pipeline (dark-green line). (The CAM pipeline previously delivered to Phillips 66’s Alliance Refinery, which was recently closed and transitioned into a crude oil terminal, now referred to as Belle Chasse by its new owner, Harvest Midstream.) In the past, Clovelly supplied the Capline pipeline (dark-blue line) via the LOCAP pipeline (light-purple line) with significant volumes of imported and GOM crude oil for ultimate delivery to refineries in Memphis and the Midwest. In 2021, Capline’s owners reversed its flow due to increasing imports of Canadian crude oil, among other factors, cutting off an important outlet for the Clovelly barrels.