The Race Is On

By: Sam Stires / August 16, 2019

A growing number of companies are “running” to build export terminals in the Gulf of Mexico. The reason for this growth is an excess amount of oil in the ports of Houston and Corpus Christi. Deepwater crude export terminals are needed from the thriving Permian Basin. Requiring billions of dollars of investment, they would stretch from Brownsville, Texas to southeastern Louisiana. “The congestion is shifting from the Permian Basin to the Gulf Coast,” said Sandy Fielden, director of oil and products research at investment research firm Morningstar. “There’s lots of traffic that these offshore terminals can sort of bypass.”

Crude-1

Approximately eight offshore oil-export terminals proposals have been reported with analysts suggesting two or three being built. One issue, the Gulf Coasts ports not being deep enough for the largest crude tankers. Corpus Christi pipelines, carrying roughly 2.5 million barrels of additional crude per day, has proposed deepening their channels. However, these projects are years from completion due to Federal funding. Whereas the Permian Basin, producing about 4.4 million barrels of oil per day (compared to less than 1 million barrels daily at the start of the decade) has caused all of this proposed growth. Congress lifting the decades old crude export ban in 2015, exports have steadily risen close to 3 million barrels per day with estimation of doubling that in a few years.

According to Ethan Bellany, an energy analyst at the financial services company Robert W.Baird & Co., “Right now, it’s a tossup. I’m not sure who will win, but we probably need another 2 million barrels per day of export capacity over the next five years,” Bellamy said. “Someone will get it done.” With this new flood of crude needed to go somewhere, the race to build terminals will intensify. Questions will remain but at least 2 or 3 projects will eventually be built, giving this influx of crude a finish line.

 

https://www.ttnews.com/articles/race-build-offshore-oil-export-terminals

https://www.houstonchronicle.com/business/energy/article/The-race-to-build-offshere-oil-export-terminals-14307770.php

 


Categories: Industry Update, Crude Exports, Gulf Coast


Sam Stires

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Sam Stires

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