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.
Canadian crude output is rising, requiring new export routes. As traditional pathways face constraints, the U.S. Rockies—especially the Guernsey, WY hub—are emerging as key corridors for moving Canadian heavy crude to downstream markets, including the Gulf Coast.
Let’s first do a quick overview of Enbridge’s impressive array of assets. It owns and operates the massive Mainline/Lakehead pipeline system, which transports Western Canadian crude oil to the U.S. Midwest. (Canadian regulators recently approved a new Mainline tolling program — see For Whom The Pipeline Tolls.) From the Midwest, Enbridge owns pipelines that transport crude to Eastern Canada and the Gulf Coast — these include Spearhead and Flanagan South from the Flanagan terminal in central Illinois to Cushing, OK, and a half interest in the Seaway system from Cushing to the Texas coast. The midstream giant also holds partial ownership interests in two crude oil pipelines out of the Permian: Gray Oak (68.5%) and Cactus II (30%). It also has partial ownership (27.6%) in the Bakken Pipeline System, which comprises the Dakota Access Pipeline (DAPL) and the Energy Transfer Crude Oil Pipeline (ETCOP). The network moves Bakken crude to the Midwest and Texas. Beyond pipes, it owns and operates EIEC and, through its ownership of Seaway, it has interests in the Seaway, Texas City and Seaway Freeport marine facilities. Enbridge is also building the Enbridge Houston Oil Terminal (EHOT), a Canadian-heavy focused terminal that will support additional exports through Seaway, plus blending and storage (see From Here to There to You).
EIEC really stands out, though, not just because it exports more crude than any other U.S. terminal — more than 900 Mb/d in Q1 2024 — but also because it is one of only three Gulf Coast terminals that regularly handle VLCCs. The original owner of the terminal, Occidental Petroleum, outfitted it with VLCC capabilities soon after it was built in 2016 (see Take It To The Limit), ostensibly betting that crude shipments abroad would take off rapidly after the U.S. ended its ban on most exports in late 2015. They were spot on!
Enbridge’s other VLCC-capable asset is the Seaway Texas City complex, a joint venture with Enterprise Products Partners near Houston. It received several supertankers in 2018 but pretty much stopped the following year because of technical challenges, although it still handles smaller ships. The Gulf’s only existing offshore crude terminal, the Louisiana Offshore Oil Port (LOOP), can fully load VLCCs, while EIEC (green tank icon in Figure 1 below) and its other Ingleside neighbor — South Texas Gateway (STG; yellow tank icon), now owned by Gibson Energy — each can load VLCCs to about two-thirds of their 2-MMbbl capacity before sending them into the Gulf for topping off via reverse lightering.
Figure 1. Crude Oil Export Terminals in Corpus Christi Area. Source: RBN
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About the song
“This Must Be the Place (Naive Melody)” was written by David Byrne, Chris Frantz, Jerry Harrison and Tina Weymouth. It appears as the fourth song on side two of Talking Heads’ fifth studio album, Speaking in Tongues. Talking about the song, David Byrne stated, “It’s a real honest kind of love song, that didn’t sound lame the way many do.” “This Must Be the Place” is also the title of a 1965 lithograph by artist Roy Lichtenstein. Released as a single in November 1983, it went to #62 on the Billboard Hot 100 Singles chart. David Byrne directed the video for the song which featured band members watching home movies. The song is also featured in Stop Making Sense, a concert film featuring Talking Heads. Personnel on the record were: David Byrne (vocals, lead guitar, synthesizer), Tina Weymouth (rhythm guitar), Jerry Harrison (synthesizer), Chris Frantz (drums), Wally Badarou (synthesizer), and David Van Tieghem (percussion).
Speaking in Tongues was recorded between July 1982 to February 1983 at Blank Tape in New York City, Sigma Sound in Philadelphia, and Compass Point in Nassau. Produced by Talking Heads, the album was released in June 1983 and went to #15 on the Billboard 200 Albums chart. It has been certified Platinum by the Recording Industry Association of America. “Burning Down the House,” released as the first single from the album in July 1983, became the band's only U.S. Top 10 single, going to #9 on the Billboard Hot 100 Singles chart. Three singles were released from the LP.
Talking Heads were an American new wave band formed in New York City in 1975 by David Byrne, Jerry Harrison, Chris Frantz and Tina Weymouth. They combined elements of pop, funk and world music and incorporated a unique new wave art school nerd image. After earning a large following at the ground-breaking punk club CBGB in the bowery of New York City, they released their first album, Talking Heads:77, on Sire Records in 1977. They have released eight studio albums, two live albums, eight compilation albums, and 31 singles. The band was inducted into the Rock and Roll Hall of Fame in 2002. They officially broke up in 1991 but have reunited a few times on various occasions. All four members have gone on to successful careers post-Talking Heads as solo artists, collaborative artists, producers and musicians.
