Laura Blewitt

U.S. crude oil exports from Gulf Coast ports are soaring — in January they averaged well over 2 MMb/d — and when you’re moving large volumes long distances by water, there’s no vessel as efficient as a Very Large Crude Carrier (VLCC). A number of midstream companies are planning costly offshore terminals that could fully load 2-MMbbl VLCCs, but jobs like that take years, and Moda Midstream is in no mood to wait. Since it acquired Occidental Petroleum’s (Oxy) Ingleside marine terminal near Corpus Christi last September, Moda has been adding new tankage and loading equipment to enable it to load up to 1.25 MMbbl onto a VLCC within 24 hours from arrival to departure, then send the supertanker out to the deep waters of the Gulf for a quick top-off via reverse lightering. Upon completion of further expansion programs, the terminal’s loading capabilities will reach a combined 160 thousand barrels per hour (Mb/hour) among its three berths. Today, we discuss recent and near-term enhancements at Texas’s newest VLCC loading facility.

With Petróleos Mexicanos’ (Pemex) refineries struggling to operate at more than 30% of total capacity, gasoline pumps across Mexico are more likely to be filling up tanks with fuel imported from the U.S. than with domestic supply. This arrangement works well for U.S. refiners, who are running close to flat-out and depending on export volumes to clear the market. But now, the Mexican government has shut a number of refined products pipelines to prevent illegal tapping, and that’s had two consequences:  widespread fuel shortages among Mexican consumers and a logjam of American supplies waiting to come into Mexico’s ports. Today, we explain the opportunities and risks posed to U.S. refiners that have ramped up their involvement with — and dependence on — the Mexican market.

In 2018, a handful of midstream companies started racing to develop deepwater export terminals along the Gulf Coast that can fully load Very Large Crude Carriers (VLCCs) with 2 MMbbl of crude oil from the Permian and other plays. While some of those companies are moving toward final investment decisions (FIDs) that would bring their plans to fruition in the early 2020s, terminal operators with existing VLCC-capable assets — both onshore and offshore — turned up the volume in a major way in December. Today, we outline the strides made in recent days by the export programs of the Louisiana Offshore Oil Port (LOOP), Seaway Texas City and Moda Midstream.

While U.S. refineries are again running hot and heavy after the end of this year’s seasonal fall maintenance period, Mexico’s refineries have continued to struggle to operate at more than 30% of their capacity, a decline that is exacerbated by that country’s tumbling oil production. In recent years, Mexico’s dismal refinery utilization rate has been a boon for U.S. refiners on the Gulf Coast who can ship, pipe or truck gasoline to America’s southern neighbor in short order. Now, Mexico’s new president, Andrés Manuel López Obrador (AMLO), is pushing to solve Mexico’s refinery problems by building a new one. Today, we discuss Mexico’s growing dependence on U.S. gasoline, and whether building a new refinery south of the border will change things.

There’s a reason why more than half a dozen midstream companies and joint ventures are clamoring to build deepwater loading terminals on the Gulf of Mexico: because it’s a major pain to load Very Large Crude Carriers (VLCCs) any other way. These days, the standard operating procedure for loading the vast majority of VLCCs along the Gulf Coast involves a complex, time-consuming and costly process of ship-to-ship transfers called reverse-lightering, in which smaller tankers ferry out and transfer crude to VLCCs in specified lightering areas off the coast. Today, we ponder the current dynamics for U.S. crude exports via VLCC.