Over the past couple of years, Corpus Christi has emerged as an attractive refining and distribution hub for Eagle Ford and more recently Permian Basin crude oil and lease condensate. Despite Corpus’s promise, however, currently low commodity prices have made key players skittish about making long-term—and potentially costly—commitments to additional Permian-to-Corpus pipeline capacity, and to crude refining, condensate splitting and marine dock infrastructure investments in or near Corpus. Today, we begin a deep-dive into Corpus Christi-area crude- and condensate-related infrastructure and Corpus’s potential as an even bigger destination for Eagle Ford and Permian output.
Few would argue with Houston’s claim to be the capital of North American refining. As we detailed in our recent Drill Down report (for RBN Backstage Pass subscribers), Stairway to Houston—Infrastructure Response to Shale Era Crude Supply Transformation, the greater Houston area has nine refineries with a combined distillation capacity of about 2.5 MMb/d; two new condensate splitters (with capacities totaling 100 Mb/d); more than 40 MMBbl of oil storage capacity (increasing to more than 50 MBbl by the end of 2016); and world-class port facilities capable of both receiving large volumes of oil (imported and domestic) and sending out large volumes of crude (to other U.S. ports and to Canada) and processed condensate (to almost anywhere in the world). Just as important (and supportive of all the above), Houston is the hub of a multi-spoke pipeline network (much of it developed or repurposed over the past three or four years) that can receive lighter crude and condensate from the Permian Basin and the Eagle Ford, lighter crude from the Bakken and other U.S. shale regions, and heavy crude from western Canada. Parts of this same pipeline network can receive imported crude from Houston-area docks, or shuttle oil east to refineries in Port Arthur, TX. Lake Charles, LA and farther up the East Coast. In sum, the Houston area’s oil-related infrastructure is a formidable beast—one that (we must point out) still needs some expansion and tweaking to function more effectively.
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