The build-out of crude oil offloading and storage facilities at bulk liquid terminals along the Gulf Coast is at full throttle, spurred by the ever-increasing volume of crude flowing to the region from southern and western Texas, North Dakota, the Rockies, Western Canada and the Midwest. Pipeline crude capacity into the Gulf Coast region has increased by 2.2 MMb/d in the past three years and is expected to grow by at least another 1.7 MMb/d over the next two years. Additional volumes of crude are arriving by rail and by inland or coastal barges and tankers. These new crude supplies need to be offloaded, stored, blended and distributed to area refineries.
Key take-aways from the report include:
- Major shifts in the sourcing of crude oil used by U.S. refineries have required the build-out of new crude delivery, storage and blending facilities along the Gulf Coast.
- A key consideration in the build-out is the need to address the mismatch between the light sweet quality of most of the new crude now being delivered to the Gulf Coast and the heavier crudes that many refineries are configured to process.
- Unit trains, ships and barges are playing critical roles in supplementing still-inadequate pipeline connections and will continue to do so.
- Midstream logistics companies are responding rapidly to changing circumstances to take advantage of new opportunities such as building crude-by-rail unloading facilities, ship-and-barge docks, and new pipelines to deliver crude to where it is most valued.
- The facility build outs will require additional storage in order to effect the hand off between different transport modes and for delivery to ultimate refinery markets.
I’m Waiting for the Crude is the fifth in RBN Energy’s Drill Down report series, a suite of twelve reports coming from RBN during 2014 covering many of the key issues expected to impact the markets for crude oil, natural gas and natural gas liquids.
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