Louisiana Rain, Part 2 - Pipe Expansions, Reversals Remaking the St. James Crude Hub

Imagine a crude oil hub with all this: a central location near the Gulf Coast; pipeline, waterborne and rail access to a wide range of imported and domestic crude; tens of millions of barrels of storage capacity; direct connections by pipe to nearly a dozen major refineries; and the ability to load “neat” or blended barrels of oil onto Aframax-class vessels for export. You’ve conjured up the hub in Louisiana’s St. James Parish, which is fast-becoming an even more significant market player, with even broader access to U.S. and Canadian crude supplies and, very likely, direct outbound links to one or more export terminals capable of fully loading VLCCs. Today, we continue our series on St. James with a look at its storage assets and at the pipes that flow into and out of the hub.

This is the second episode in our series focusing on the ongoing transformation of the St. James hub. In Part 1, we explained that, with the onset of the Shale Revolution, growth in Alberta oil sands production in the 2010s, and the lifting of the U.S. crude export ban three-plus years ago, St. James has been in a state of flux — and the changes have only just begun. Most importantly, the hub’s long-standing role as a recipient and distributor of imported crude and Gulf of Mexico production has been fading, and St. James — located 60 miles upriver from New Orleans — is increasingly valued for its ability to receive U.S. shale oil and Canadian oil-sands crude for delivery to area refineries and export docks.

Today, we get to the nitty-gritty of what St. James currently offers in terms of crude storage and connectivity, as well as what expansion plans are afoot to reflect the hub’s changing function. According to our friends at Genscape, there is about 38 MMbbl of crude storage capacity in place at St. James (see Figure 1), with the largest players being Plains All American, with more than 12 MMbbl of tankage; NuStar Energy, with ~11 MMbbl of storage; and the Capline pipeline, with ~5.6 MMbbl. Of the 38-MMbbl total, about 33 MMbbl is operational (orange bar segments) and about 5 MMbbl is “currently offline” (blue bar segments) — that is, either in maintenance, mothballed or being refurbished — including ~3.5 MMbbl at Capline. Storage inventories at St. James averaged about 16.2 MMbbl in January, or about half of the operational capacity, again according to Genscape.

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