Houston — Options for exporting more US crude oil from the burgeoning hub of Corpus Christi, Texas, continue to expand as companies prepare for a flood of crude available to head there within the next year.
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Planned long-haul pipelines out of the Permian Basin will potentially bring an additional 1.9 million b/d of light, sweet crude and condensate to Corpus Christi by the end of 2019. That's on top of the about 2 million b/d of crude from the Permian Basin and Eagle Ford Shale play that reaches the port city currently.
As the area only has three refineries and two condensate splitters, with a combined capacity of about 795,000 b/d, much of the oil that makes its way to the port has to be exported, or transported by water.
Exports of WTI and Eagle Ford crude and condensate out of Corpus Christi are also ramping up.
The port is the closest -- and cheapest -- point along the Gulf Coast to buy Eagle Ford crude and condensate. WTI Midland crude also is available there.
Corpus Christi, located about 220 miles southwest of Houston, is less congested, has less fog and has a deeper draft than the Port of Houston. All of those reasons, traders say, can make it more appealing for exports.
By exporting crude from Corpus Christi, buyers and sellers can avoid the snarl of Houston pipeline and port logistics and marine bottlenecks there.
In June, the port of Corpus Christi exported 619,242 b/d of crude, according to port data. In January, the port exported 458,153 b/d.
Current facilities in Corpus Christi have the ability to export some 1.1 million b/d of crude, including those operated by Flint Hills Resources, NuStar Energy, Occidental Petroleum -- the project was recently acquired by Moda Midstream, Valero Energy, Buckeye Partners/Trafigura and Magellan Midstream Partners.
By late 2019, numerous projects at the port aim to more than double the export capacity to around 2.4 million b/d, according to S&P Global Platts Analytics data. That number could top 3.2 million b/d in early 2021 if all of the proposed projects are completed.
Driving this is expansion are expected production increases in the Permian Basin, as well as the nearby Eagle Ford play. Crude pumped there will feed new or expanded pipelines including the 590,000 b/d EPIC line; Plains All American's 650,000 b/d Cactus II line and the 700,000 b/d Gray Oak line proposed by Phillips 66/Andeavor.
Some planned infrastructure projects in Corpus Christi have focused on the need to directly load VLCCs that can transport some 2 million barrels of crude.
However, until planned dredging of the Corpus Christi main channel is complete, or until a offshore crude export terminal is built, that will be impossible as the bay is too shallow to load VLCCs currently.
So other projects are focused on shorter-term goals such as expanded tank storage and the more efficient loading of smaller Aframax or Suezmax-sized vessels that can more easily fit into the bay.
Flint Hills this week joined the growing list of energy players that are looking to expand their storage and export capabilities in Corpus Christi.
The company announced Tuesday it will more than double the crude export capacity at its Ingleside, Texas, terminal on Corpus Christi Bay by October 2019.
Flint Hills, which also has a 300,000 b/d refinery in Corpus Christi, will add four crude storage tanks and expand loading capacity at the nearby Ingleside terminal to about 380,000 b/d. S&P Global Platts estimates its current operating capacity at 174,000 b/d.
Flint Hills also said it is evaluating a separate project that would allow for the loading of VLCCs. The company did not provide further details about that project on Tuesday. Flint Hills did not respond to a request for more details.
Other big projects on the horizon include development of the Ingleside Energy Center, recently acquired by Moda from Oxy. The facility, which will ramp up from handling about 250,000 b/d to 750,000 b/d in 2019, will connect to the new pipelines planned for the area and will load Aframax, Suezmax and eventually VLCC-sized vessels.
Buckeye Partners, along with Philips 66 and Andeavor, plans to build the 555,000 b/d South Texas Gateway terminal, which will include 3.4 million barrels of storage in Ingleside and the ability to load Suezmax and eventually VLCC-sized vessels. The terminal will be built on a 212-acre waterfront parcel land at the mouth of Corpus Christi Bay and serve as a primary outlet for the 700,000 b/d Gray Oak pipeline.
--Laura Huchzermeyer, laura.huchzermeyer@spglobal.com
--Edited by Keiron Greenhalgh, keiron.greenhalgh@spglobal.com