Texas Gulf Coast crude export projects progressing; Corpus expansion soon in final phase

The development of multiple crude oil export projects along the Texas Gulf Coast, including two offshore, is advancing according to plans, speakers at a Houston conference said June 8.

"Construction of any of these offshore terminals is going to radically change export flows on the Gulf," said RBN Energy Executive Chairman Rusty Braziel at the company's Xportcon conference. "These facilities have a substantial shipping advantage over onshore terminals. They're the only way to get WTI on VLCCs."

Total US crude exports is forecast to grow from 4.1 million b/d in 2023 to 5.7 million b/d in 2030, RBN Energy data showed.

The Port of Corpus Christi's channel improvement project, aimed at deepening and widening the draft to the Enbridge Ingleside Energy Center, has taken the lead among the new projects as it nears its last phase of construction, according to port spokesperson Omar Garcia.

Previously limited by a depth of 47 feet, the port's channel improvement project would deepen the Ingleside channel draft to 54 feet and widen it to 530 feet.

Broken up into four phases, Garcia anticipates phases 2 and 3 to be completed in the next 60 to 90 days, which the port has said will allow 15% more loading onto VLCCs and the complete loading of a Suezmax at the same time. Prior to the improvement project, the Ingleside terminal could only support loading up to 1.2 million barrels of crude onto a VLCC, which has a total capacity of 2.2 million barrels.

Phase 4 is slated to be awarded in the next two to three months, Garcia added. "We hope to see completion of all four phases at the end of next year," he said.

Price advantage

Panelists also discussed the "Ingleside advantage," noting that export shipping rates to Europe and Asia were more cost-effective from Corpus Christi compared to Houston, Braziel said.

RBN Energy data showed that shipping a Suezmax from Houston to Europe cost $3.14 million, while rates out of Corpus Christi were at $2.67 million for the same destination. Loading a VLCC demanded a similar premium for a Houston-Europe route, costing $3.20 million compared to Corpus Christi-Europe rates at $2.60 million.

Corpus Christi was also the competitive destination for Permian Basin crude outflows, with the port accounting for 2.3 million b/d, or 39% of Permian crude headed to the US Gulf Coast. This was largely possible because of combined pipeline capacity from the Gray Oak, EPIC and Cactus I and II pipelines that transport crude from the Permian to Corpus Christi.

The Gulf of Mexico has a total 7.1 million b/d of export capacity, with Corpus Christi exporting 3.5 million b/d on average in 2023 with dock capacity still available, Braziel said.

Export capacity in Corpus Christi is still limited however. Despite the leftover capacity to receive supply, new pipelines need to be built in order to bring in additional flows from the Permian.

"Growth is going to Houston unless somebody builds more Corpus Christi pipeline capacity," Braziel said.

Deepwater projects

Another major export project, Energy Transfer's proposed deepwater Blue Marlin oil terminal at the Nederland Terminal in Jefferson County, would allow loading for up to 20 tankers per month and is expected to be able to fully load one VLCC daily.

"People are calling for optimization around the Gulf Coast," Adam Arthur, executive vice president of the company, said. Blue Marlin is highly optimized, taking up only 226 incremental acres offshore, he offered.

Energy Transfer expects to see project completion around 24 to 30 months following a final investment decision and anticipates a license date from the US Department of Transportation's Maritime Administrationsometime during the second quarter of 2024.

Enterprise Products Partners Vice President Tony Chovanec said his company's proposed Sea Port Oil Terminal, off the coast of Brazoria County, is expected to load a VLCC at 85,000 barrels/hour. Such a pace that would result in a full cargo in about 26 hours.

Enterprise anticipates US oil production to reach an estimated 20 million b/d by 2030, with US demand to account for 15 million b/d during the same time period.

Chovanec pointed to a remaining balance of 6.2 million b/d as a driver for building out export capacity through the SPOT project. The company plans to construct a new crude oil pump station at the onshore ECHO terminal, as well as a pipeline connecting SPOT to the onshore Oyster Creek terminal, he said.