Trafigura

The four deepwater crude oil export projects under development along the U.S. Gulf Coast are getting closer to receiving their regulatory go-aheads after years of planning and millions of dollars spent. In fact, Enterprise’s Sea Port Oil Terminal (SPOT) received its license in April. These projects have sparked commercial and wider market interest because of the many benefits they may provide — including the ability to fully load 2-MMbbl Very Large Crude Carriers (VLCCs) without any reverse lightering. In today’s RBN blog, we highlight key insights from our new Drill Down Report on the four projects, the potential benefits and the challenges they face. 

The four deepwater crude oil export projects under development along the U.S. Gulf Coast are getting closer to receiving their regulatory go-aheads after years of planning and millions of dollars spent. In fact, Enterprise’s Sea Port Oil Terminal (SPOT) received its license in April. These projects have sparked commercial and wider market interest because of the many benefits they may provide — including the ability to fully load 2-MMbbl Very Large Crude Carriers (VLCCs) without any reverse lightering. In today’s RBN blog, we highlight key insights from our new Drill Down Report on the four projects, the potential benefits and the challenges they face. 

Bluewater Texas, proposed by a 50/50 joint venture (JV) of Phillips 66 (P66) and commodity trading giant Trafigura, is in a unique position in the race to construct a deepwater crude oil export facility along the U.S. Gulf Coast. Of the four marketed deepwater proposals, Bluewater is the only project in the export-centric Corpus Christi market. It is also the only one in the group that does not include an offshore platform in its scope. In today’s RBN blog, we will explore these and other differences that set Bluewater apart. 

As we see it, 2023 will be another strong year for U.S. crude oil exports, driven in large part by rising domestic production. Upstream companies in the Permian and other U.S. shale plays are gradually ramping up their output and, with domestic refineries largely maxed out on how much light-sweet oil they can use, it’s safe to say that the vast majority of the incremental oil produced will end up at export terminals along the Gulf Coast. And if production continues growing (as we expect), there’s likely to be room — and a strong economic rationale — for one or more new offshore terminals to be built in the deep waters of the Gulf itself. Each of these proposed facilities would offer shippers what they want most: easy access to large volumes of oil and the ability to fully load 2-MMbbl VLCCs without any reverse lightering, which brings cheaper and cleaner export options to the market. In today’s RBN blog, we provide updates on two offshore projects still in the running: Sentinel Midstream’s Texas GulfLink and Phillips 66 and Trafigura’s Bluewater Texas.

Since mid-July — only a few weeks ago — four proposals have been unveiled to build offshore crude export terminals along the Gulf Coast that would be capable of fully loading Very Large Crude Carriers. That’s an extraordinary burst of interest in new infrastructure development, and a signal that (1) more export growth is on the horizon and (2) VLCCs will play a much bigger role in transporting that crude. A leading contender in the race to construct new offshore terminals is Trafigura, the Swiss-based logistics and physical-trading giant, which in recent years has become a major player in U.S. energy markets. Today, we continue our review of made-for-VLCCs offshore terminals with a look at Trafi’s plan.

Average margins for a Gulf Coast condensate splitter have been about $5/Bbl better in 2015 than they were in 2014 but are still about $4.75/Bbl worse than an equivalent Gulf Coast 3-2-1 crack spread. The economics of condensate splitters have also yet to be tested in an environment if – as could happen later this year – crude production begins to decline. Are condensate splitters a better investment than just exporting lightly processed condensate under relaxed export regulations? Two companies considering projects seem to have reached different conclusions recently. Today we continue our update on splitter projects with a look at economics.

Since the start of 2013 Corpus Christi marine terminal facilities have increased crude and condensate storage by 10 MMBbl and throughput capacity from 225 Mb/d to nearly 1 MMb/d. Upwards of 700 Mb/d is leaving the Port of Corpus Christi by barge and tanker – most of it headed along the Gulf Coast to Houston or Louisiana. Waterborne traffic congestion in Corpus is already limiting terminal throughput but the potential for increased exports of condensate and refined products from planned condensate splitters suggest the traffic will get worse soon. Today we survey current Corpus terminal facilities.

Just four years ago (October 2010) the Eagle Ford Basin was producing less than 100 Mb/d of crude oil. Now production is over 1.5 MMb/d and in the interim a network of gathering, pipeline and terminal infrastructure has sprung up to deliver crude and condensate to market via Houston and Corpus Christi. The quality challenge of handling up to 45 percent condensate has changed in the last year from one of “dealing with” unwanted super-light crude into a midstream scramble to build condensate splitters and now export facilities. Today we continue our survey of changing Eagle Ford infrastructure by looking at Harvest, Martin, Trafigura and Buckeye.

Total crude oil shipped out from the South Texas Port of Corpus Christi increased 19 fold between November 2011 and November 2012 from 2.1 MMBbl to 36 MMBbl. All of that crude is coming from the Eagle Ford shale oil basin 70 miles north of Corpus in the form of light crude or condensate via pipeline. Six marine terminals have been built or expanded at Corpus but can they handle the traffic jam? Today we review how the Port is coping.