There’s a horse race among Gulf Coast gas storage developers to provide the tens of billions of cubic feet of incremental space that will be needed by the early 2030s. Out front are the owners of existing salt cavern storage. But which brownfield projects have that special something?
The volumes of Permian natural gas flowing into the Katy area west of Houston will be increasing sharply, as will gas demand from LNG export terminals near the Texas/Louisiana border. Three new pipelines are being developed to move gas from between Katy and the state line, but will they be enough?
The Gulf Coast gas storage market today is a different animal, marked by steeper prices, an emphasis on high injection and withdrawal rates, and a looming capacity shortfall. How did we get here, which market players are shaping things the most, and how much new gas storage is likely to get built?
Just a few years ago, natural gas storage capacity along the Gulf Coast was widely available at low cost, but that has all changed. A storage-capacity shortfall is looming as new LNG export facilities come online, and the competition among storage developers is heating up. There will be winners and losers.
Construction is underway at Blue Point One (#32 in map below), a low-carbon ammonia plant in Modeste, LA, billed by the joint venture’s partners — CF Industries (40%), JERA (35%) and Mitsui (25%) — as the world’s biggest of its kind. The plant will have an annual capacity of 1.4 million MT and is expected to begin production in 2029.
Louisiana’s refineries process vast amounts of domestic crude oil — much of it from the offshore U.S. Gulf — and imported oil from Canada and other countries. The refineries also play a critically important role in supplying refined product to the Southeastern U.S and the Mid-Atlantic states.
Each of Louisiana’s three refining regions has its own sources for crude oil and its own way of delivering that oil to refineries. Today, we look at crude oil flows and supply/demand balances in the southwestern and northwestern parts of the Bayou State — and how the status quo may be in for changes.
Crude oil sourcing for the three refining regions in Louisiana couldn’t be more different from each other. In today’s RBN blog, we examine crude oil flows into and out of the Bayou State, assess supply/demand balances, and explore why is could be increasingly important to understand those balances.
Louisiana refineries don’t pipe in all the crude oil they need from the Houston and Nederland areas or the U.S. Gulf, or ship it in from abroad. Some depend on crude that is piped in from Longview, TX, and others get at least some of their oil from Capline, which moves crude south from Illinois.
The sourcing of crude oil for the 14 refineries in Louisiana has been shifting over the past few years and the pace of that shift is picking up as more U.S. Gulf production flows to Texas (and less flows to the Bayou State), new pipeline projects come online, and refineries modify their crude slates.
