Where Will You Go - Crude Supply vs. Export Capacity at Beaumont-Port Arthur

As new crude oil pipeline capacity to the Gulf Coast comes online, a growing disconnect is developing between the surplus crude volumes available for export and the actual export capacity at coastal terminals, particularly projects that would accommodate the more economical and efficient Very Large Crude Carriers (VLCC). This is especially true in the Beaumont-Port Arthur, TX, area, where the relatively shallow depth of the Sabine Neches Waterway limits vessels to Aframax-class ships or partially loaded Suezmax tankers. If planned pipeline expansions into the BPA region over the next two years are completed, over 1 MMb/d of additional crude exports would need to leave BPA terminals to balance the market. Today, we look at current and future export capacity out of BPA.

This blog is based on research from Morningstar Commodities. A copy of the original report is available here.

Gulf Coast crude exports have expanded almost eightfold in the past three-plus years, from just under 300 Mb/d on average in 2016, to an average 2.6 MMb/d between January and October 2019, according to RBN’s Crude Voyager report. We’ve closely followed developments in crude pipeline and export terminal capacities in the RBN blogosphere. In Take It To the Limit earlier this year, we looked at the rising marine activity that has been testing the limits of existing crude export infrastructure at the Gulf Coast ports, and our Slow Ride series broke down the host of issues facing Texas ports — in particular, the Port of Houston — as export volumes rise. And, a couple of months ago, in Break On Through, we discussed the surge in crude exports from the Port of Corpus Christi as two new pipeline systems from the Permian — Cactus II and EPIC — came online.

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