Sunoco Records Million-Barrel Quarter – Nederland Crude Volume Surges

Crude oil throughput volumes at Sunoco Logistics’ Nederland Terminal on the Texas Gulf Coast increased by 35 percent from 690 Mb/d in Q2 2012 to 932 Mb/d in Q2 2013 – that’s nearly a million barrels a day! (Source: Sunoco Logistics earnings call). By the end of 2014 another 1 MMb/d of crude will be flowing through Nederland, as it becomes a pivotal storage and distribution terminal for Gulf Coast refineries. Today we describe Nederland’s growing crude advantages. 

As we have discussed previously, the Nederland terminal is owned by Sunoco Logistics Partners, LP. – subsidiary of Energy Transfer Partners LP (see Nederland Crude Wonderland). Nederland is at the heart of the company’s successful crude oil storage and pipeline distribution network. The terminal is located on the Sabine-Neches waterway between Beaumont and Port Arthur, TX (see map below). The location is in the heart of Beaumont/Port Arthur refining country – home to four large refineries owned by ExxonMobil (Beaumont, 365 Mb/d), Valero (Port Arthur, 310 Mb/d), Total (Port Arthur, 174 Mb/d) and Shell/Saudi Aramco (Motiva 600 Mb/d). The Sabine Neches Waterway connects to the Gulf of Mexico, providing waterborne

access to the entire Gulf Coast region. Nederland is about 100 miles East of Houston and 350 miles West of New Orleans.

Source: RBN Energy (Click to Enlarge)

 

The Nederland terminal provides storage, blending and pipeline/waterborne distribution services for refiners and crude oil marketers. In addition to crude oil, the facility handles other refinery feedstocks, lubricants, petrochemicals, and bunker oils (used for fueling ships and other marine vessels), and also blends lubricants. The terminal has a storage capacity of approximately 22 MMBbl in about 130 aboveground storage tanks with individual capacities of up to 660 MBbl. Nederland can load crude into or receive it from ocean going tankers at five ship docks and coastwise barges at three barge berths along the Sabine Neches waterway. The five ship docks are capable of receiving over 2 MMb/d of crude oil. Nederland is also connected to the Kansas City Southern railroad and Sunoco can currently offload 20Mb/d – meaning they can handle a unit train in four days. Crude oil arriving by rail can be offloaded into pipelines or onto barges for redelivery throughout the region.

Existing Pipeline Connections

Nederland connects to incoming crude production and Gulf Coast refining capacity as follows:

  • Inbound crude from the 200 Mb/d Shell Houma to Houston “Ho-Ho” pipeline from Houston that is in the process of being reversed (see Oh-Ho-Ho It’s Magic). The first phase of the Ho-Ho reversal flows crude from the Houston Ship Channel to Nederland. Phase 2 of the reversal will extend the pipeline to Lake Charles and St. James, LA - allowing Nederland to supply refineries to the East.
  • Outbound crude service via a dedicated 30-inch crude pipeline to the 600 Mb/d Motiva Port Arthur refinery as well as 2MMBbl of storage capacity leased to Motiva. Nederland also has direct pipeline connections to the ExxonMobil Beaumont refinery and the Valero and Total Port Arthur refineries.
  • Inbound crude on the 350 Mb/d Cameron Highway Oil Pipeline (CHOPS) that delivers Gulf of Mexico crude oil production from the Garden Banks, Cameron, Poseidon and Green Canyon fields. CHOPS is owned by Enterprise Products and Genesis Energy. Incoming crude is a mixture of medium sour grades with average API gravity degrees of 28.6 and sulfur content of 2.28 percent (2013 year to date averages). This crude can be processed directly by Port Arthur refineries as well as blended with lighter crude from the Eagle Ford (delivered on Ho-Ho or by barge from Corpus Christi).
  • Inbound crude from Chicago via the 96 Mb/d ExxonMobil Pegasus pipeline that runs from Patoka, IL to Nederland. This pipeline was ruptured back in March 2013 and has been closed since then.
  • Department of Energy pipelines that deliver crude to and from US Government Strategic Petroleum Reserve (SPR) Storage at Big Hill and West Hackberry (250 Mb/d capacity each). The use of these facilities will likely decline as increasing domestic crude production reduces US dependence on imports – the rationale behind the SPR.
  • The Sunoco Logistics West Texas Gulf (WTG) and Permian Express Phase 1 pipelines that currently bring 90 Mb/d of crude into Nederland from the Permian Basin. The WTG pipeline is not currently operating between Wortham and Nederland because the final leg of the journey uses the ExxonMobil Pegasus pipeline that is out of service (see above).

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