The White House has issued a 60-day waiver of the Jones Act, which will allow foreign tankers to move crude oil and refined products between U.S. ports in a bid to cool gasoline prices. Today, we dive into what the waiver could mean for U.S. refiners, consumers, and other market participants.
After a decade-long odyssey and a cost-per-mile that must make public-sector accountants in Ottawa wince, the Canadian government-owned Trans Mountain Expansion Project (TMX) — which nearly tripled the capacity of the original Trans Mountain Pipeline (TMP) from Alberta to the British Columbia (BC) coast — finally came into service in May 2024. As one of Canada’s most anticipated energy infrastructure projects in many years, the 590-Mb/d TMX pipeline — built alongside the long-standing 300-Mb/d TMP — was widely touted by its advocates as a surefire way to boost exports of Western Canadian crude and reduce the nation’s near-complete reliance on exporting crude oil to — and through — its primary customer, the U.S. In today’s RBN blog, we discuss some of the surprising (and not so surprising) market developments since the expansion project started.
Enbridge’s recent $200 million deal to buy two marine docks and land in Ingleside, TX, from Flint Hills Resources (FHR) may not be much of a surprise, as expanding its role in U.S. crude exports has been part of Enbridge’s strategy since it bought Moda Midstream’s big marine terminal next door nearly three years ago. The former Moda terminal, now known as the Enbridge Ingleside Energy Center (EIEC), can receive and partially load Very Large Crude Carriers (VLCCs) — a key reason why the facility is #1 in crude exports in the nation. In today’s RBN blog, we will take a closer look at Enbridge’s deal with FHR and how it might help grow its crude export volumes.
This blog is based on research from Morningstar Commodities. A copy of the original report is available here.
U.S. crude exports out of the Gulf Coast averaged more than 2.4 MMb/d in the first four months of 2019 — using infrastructure that is increasingly constrained by a lack of deepwater ports. U.S. crude is reaching destinations worldwide, with large volumes traveling long distances to Asia on gargantuan 2-MMbbl vessels — Very Large Crude Carriers (VLCCs) — loaded offshore by ship-to-ship transfer. Shipments to Europe are primarily on smaller Suezmax and Aframax vessels. Overall, the increased marine activity is testing the limits of existing infrastructure. Today, we analyze the past 16 months of crude export vessel movements and their impacts on Gulf Coast ports. (We’ll also be discussing this and other critical trends related to U.S. export markets live and in person tomorrow at xPortcon in Houston.)
Waterborne crude shipments out of the Port of Corpus Christi are still growing this year – averaging 700 Mb/d as of May 2015. A veritable armada of barges and tankers has converged on South Texas to help move all that crude. A large part of the shipments are on small inland tank barges plying the Gulf Intracoastal Waterway (GIWW) - a 65 years old canal system that forms a vital backbone for Gulf Coast refiners. Today we describe the changing profile of barge shipments along the Gulf of Mexico.
With crude prices close to six year lows and the futures market pointing higher, a number of the larger commodities trading houses are buying and holding cheap crude in huge floating tankers for later sale. For the trade to work, prices today must be lower than they are in the future and the spread must cover the storage cost and other expenses. Players in the floating storage game have to be high rollers – the minimum cost of a bet at this table is ~$100 million. Today we complete a two-part series on contango-spread trades with a look at floating storage.
In December 2013 US Midstream giant Kinder Morgan agreed to spend nearly $1 Billion to get into the oil tanker business by buying two companies that own 5 US registered “Jones Act” vessels and are in the process of building 4 more. These tankers are part of an exclusive fleet of just 42 self propelled ocean going vessels that deliver oil or refined products between US ports. Booming US crude production along with constrained onshore delivery infrastructure have increased demand for tankers that can ship oil along coastal waters. Long-term charter rates for these tankers jumped to over $100,000/day in 2013 compared to an average of $56,000/day in 2012. Today we begin a blog series looking at the US flagged tanker fleet and plans to expand it by 35 percent in the next 2 years.
The volume of crude moving out of Corpus by barge and tanker increased from 7 Mb/d in January 2012 to 370 Mb/d in May 2013. At the same time two 300 Mb/d plus pipelines from the South Texas Eagle Ford to Houston are running at less than half full. We know these stats because of information from a company called Clipper Data, which among other things provides detailed waterborne movements of Eagle Ford crude from the Port of Corpus Christi to Gulf Coast destinations. Today we examine the shipping data for clues.
