For a few years now, crude oil shippers out of the Permian have enjoyed a surplus in pipeline takeaway capacity thanks to a slew of new pipes that came online just as COVID crushed demand, prices and production. But Permian production has recovered, and the takeaway situation is changing for some routes. For example, the pipelines from West Texas to Corpus Christi are running close to full, and if a new offshore export terminal gets built, Permian-to-Gulf-Coast takeaway dynamics would get far more complicated — and fast. In today’s RBN blog, we discuss highlights from our new Drill Down Report, which examines Permian crude flows to existing export terminals and the potential impacts of a new deepwater facility.
Houston
Thursday, 6/20/2024
The Nederland/Beaumont crude oil hub has been somewhat overshadowed recently by other Gulf Coast crude export hubs despite hosting America’s largest refinery, a handful of export terminals and pipeline links to the prolific Permian Basin. But while plans to build one or more deepwater crude export terminals could mean big changes for the Gulf Coast hubs, the Nederland/Beaumont area isn’t standing still. In today’s RBN blog, we discuss what’s ahead for the region and its emergence as a leader in NGL exports.
Houston (Means I'm One Day Closer to You) - Deepwater Port Could Bolster Houston’s Status as Oil Hub
Wednesday, 5/22/2024
The Houston crude oil hub has become busier over the last few months, and if one or more proposals to build a deepwater export terminal nearby capable of fully loading a Very Large Crude Carrier (VLCC) cross the finish line, it could become the hub supplying them. That could push Permian Basin oil flows on Houston-bound pipelines higher at the expense of flows to Nederland and Corpus Christi. In today’s RBN blog, the third in a series, we will examine the latest Permian oil flows to Houston and how that could change if and when a deepwater project comes online.
Wednesday, 5/08/2024
The Corpus Christi crude oil market is pulling as much volume as it can from the Permian Basin via pipelines that are running nearly at capacity. That explains why two midstream companies are responding with plans to boost the capacities of their respective pipelines from the Permian to refineries and export terminals in the Corpus area. But the situation is complicated by the very real possibility that one or more deepwater export facilities capable of fully loading a Very Large Crude Carrier (VLCC) may be built off the Texas coast. In today’s RBN blog, we’ll examine current and proposed pipeline takeaway capacity out of the Permian and the potential for proposed offshore export facilities to impact pipeline flows from West Texas to the coast.
Monday, 4/29/2024
The largest crude oil pipeline exiting the Permian Basin by volume — Wink to Webster (W2W) — is planned to be offline for maintenance for the first 10 days of June. This is inclusive of Enterprise’s Midland-to-ECHO III (ME III), which reflects the company’s 29% undivided joint interest in W2W. Although the outage has not been publicly confirmed, it’s our understanding that 1.5 MMb/d of capacity will be offline to reroute a small section of pipeline. In today’s RBN blog, we’ll examine how the planned maintenance will impact Permian Basin oil takeaway capacity and what it may mean for Midland WTI pricing.
Wednesday, 9/06/2023
Considerable time and effort has been spent tracking the federal government’s plan to spend billions of dollars to create a number of regional hydrogen hubs. News about the Department of Energy’s (DOE) hub-selection process has been hard to come by, especially since the potential applicants weren’t publicly disclosed at the time of the agency’s informal cutdown in late 2022 and many potential developers, for competitive reasons, have elected to play their cards very close to the vest. In today’s RBN blog, we’ll publish the DOE’s full list of 33 encouraged proposals for the first time, examine some of the plans that were combined in an effort to produce a stronger joint application, and share a little about the concept papers that didn’t make the DOE’s informal cut.
Friday, 9/01/2023
The level of activity at crude oil export terminals from Corpus Christi to the Louisiana Offshore Oil Port (LOOP) is nothing short of extraordinary — a record 4.8 MMb/d was loaded the week ended August 25, according to RBN’s Crude Voyager report, and Houston-area terminals loaded an all-time high of 1.4 MMb/d. But there’s a lot more to the crude exports story. When you live this stuff day-in, day-out, you see subtle changes that often extend into trends and, if you’re lucky, you sometimes get signals that things you’d been predicting are actually happening. In today’s RBN blog, we discuss highlights from the latest Crude Voyager and what the weekly report’s data and analysis reveal about the global oil market.
Tuesday, 8/22/2023
There’s a lot going on in North American crude oil markets these days. Exports are running strong. Midland WTI is now deliverable into Brent (but only if it meets specs). Pipelines from the Permian to Corpus Christi are maxed out, pushing incremental production to Houston. The price differential between WTI at Midland and Houston is nearing zero. And the value of heavy Western Canadian Select (WCS) delivered to the U.S. continues to bounce all over the place. Are these unrelated, random events in the quirky U.S. physical crude market, or are they logical developments linked by the economics of refinery preferences, quality shifts, export demand, and logistics? As you might expect, we think it’s the latter. Believe it or not, crude markets sometimes do behave rationally — and, from time to time, even predictably. That’s what we explore in today’s RBN blog.
Monday, 4/03/2023
There’s been a lot written about the federal government’s plan to provide billions of dollars in financial support to create a limited number of regional hydrogen hubs but not a lot of insight about how those hub proposals are being crafted to meet the Department of Energy’s (DOE) selection criteria. The details and strategies behind those plans have been hard to come by because few of the initial concept papers were made public while others remain a mystery, even months after the first informal winnowing of candidates. One exception is the Leading in Gulf Coast Hydrogen Transition (LIGH2T) hub proposal being prepared by a consortium that includes a large group of states, some key commercial partners, several universities and the National Energy Technology Laboratory (NETL). In today’s RBN blog, we look at what we know about the LIGH2T proposal, which will submit a full application by the April 7 deadline, and how it addresses three key factors likely to play a role in the selection process.
Wednesday, 3/22/2023
In small steps and giant leaps, Enbridge has been building out two “supersystems” for transporting crude oil to refineries and the company’s own export terminals along Texas’s Gulf Coast, one moving heavy crude all the way from Alberta’s oil sands to the Houston area and the other shuttling light oil from the Permian to Enbridge’s massive terminal in Ingleside on the north side of Corpus Christi Bay. There’s nothing quite like it — first, an unbroken series of pipelines from Western Canada to Enbridge’s tank farm in Cushing, OK, (via the Midwest) and from there to Freeport, TX, on the twin Seaway pipelines; and second, the Gray Oak and Cactus II pipes from West Texas to the U.S.’s #1 crude export terminal. And the midstream giant is far from done. New projects and expansions are in the works, as we discuss in today’s RBN blog.
Monday, 2/27/2023
For several years now, almost all the Permian’s incremental crude oil production has moved to export markets along the Gulf Coast. Due to new pipeline capacity and shipping cost advantages, Corpus Christi has enjoyed a disproportionate share of those volumes. But the market is shifting. Pipelines to Corpus are filling up, and that is pushing more oil to Houston for export — and to Beaumont for ExxonMobil’s new 250-Mb/d refinery expansion. Unless the pipes to Corpus expand their capacity, much more oil supply will be targeting Houston, with important implications for pipeline capacity, dock capacity, and regional price differentials. In today’s RBN blog, we explore these issues and what could throw a curveball into the whole Gulf Coast crude oil market.
Wednesday, 2/15/2023
It’s been an awesome run for the Port of Corpus Christi’s crude oil export business, which captured about 60% of total U.S. volumes in 2022, up from only 28% in early 2018. But the rate of increase has slowed way down, even though shipping economics give Corpus a distinct advantage. The problem? Pipeline capacity, or more accurately, a lack thereof. The pipelines from the Permian to Corpus that were the driving force behind the Corpus export success story are filling up. The only questions are, how much time is left before the pipes are truly maxed out and what is likely to be done about it? In today’s RBN blog, we examine the data to see what it reveals about the looming capacity constraints.
Sunday, 9/11/2022
Massive shifts are occurring in the U.S. crude oil export market, but you wouldn’t know it from the steady-as-she-goes pace of activity. The volumes being loaded along the Gulf Coast have stayed within a relatively tight range — 2.5 MMb/d to 3.2 MMb/d — for 12 consecutive quarters now, and the export pace for each of the past three quarters has remained within a few thousand barrels of 3 MMb/d. So, what’s changed? For one thing, Corpus Christi is now by far the dominant point of export, with Houston, Louisiana, and Beaumont/Nederland trailing. Another is that Europe, heavily impacted by the sharp decline in imports from Russia, is now the leading destination for U.S. barrels. There are other changes, too, including increased use of Very Large Crude Carriers (VLCCs) and terminal expansion projects. In today’s RBN blog, we discuss highlights from our recently published Crude Voyager Quarterly Report.
Monday, 8/22/2022
It wouldn’t be hard to work up a checklist of the qualities that a major clean hydrogen hub should offer. Easy access to low-cost natural gas for methane reforming, and to carbon sequestration sites for captured carbon dioxide (CO2). Plentiful wind and solar energy to power electrolyzers that split water into hydrogen and oxygen. Lots of available land for clean hydrogen and ammonia production facilities. Nearby refineries and other industrial consumers of hydrogen. And don’t forget export terminals, because the rest of the world will continue to demand U.S.-sourced energy. Well, as we discuss in today’s RBN blog, Corpus Christi seems to check all the boxes.
Tuesday, 7/26/2022
It took many decades to build out the U.S.’s natural gas production, processing and transportation infrastructure, and just as long to develop demand for natgas — the many millions of residential, commercial, industrial and power-generation customers that now depend on U.S. gas, both domestically and, more recently, internationally as well. Now, with action on both climate change and energy security top of mind, there’s a big push to add clean hydrogen to the energy mix as quickly as possible, as evidenced by the Department of Energy’s plan to invest up to $8 billion in the development of four or more “hydrogen hubs.” This time, we won’t have decades to build out the clean hydrogen supply, demand and infrastructure that will be needed to make a real difference — and that’s precisely the point being made by the folks in and around Houston, who assert that the region has just what it takes to get a consequential hydrogen hub up and running. In today’s RBN blog, we continue our look at the federal government’s push to advance clean hydrogen and the Houston-led effort to make the western Gulf Coast a center of hydrogen-related activity.