If you think, as we do, that (1) U.S. crude production is likely to increase by 1.5 to 2 Mb/d over the next five years, (2) almost all of those barrels will be light crude that will need be exported and (3) exporters will overwhelmingly favor marine terminals that can accommodate Very Large Crude Carriers (VLCCs), it would be hard to ignore the game-changing impacts that Enterprise Products Partners’ planned seaport oil terminal could have. SPOT, which could be completed as early as 2026, will have solid pipeline connections from the Permian and other shale plays and will be capable of fully loading a 2 MMbbl VLCC in one day, enough to handle virtually all incremental exports that are likely to see in the next five years. In today’s RBN blog, we discuss the rapidly growing role of VLCCs in US crude oil exports and the potentially seismic impacts of the SPOT project.
RBN’s mid-term “average” forecast sees U.S. crude production rising to 14 Mb/d in 2028, about 2 Mb/d higher than the 2022 average, with three-quarters of that incremental production from the Permian and most other shale plays that also produce high API gravity, low sulfur oil – see The price you pay for more (and a downloadable MS Excel version of this forecast). Given that the ability of US refineries to economically process light and sweet crude is essentially maxed out, it’s a good bet that almost all of those incremental barrels will be destined for export terminals along the Gulf Coast. And, as we said a Calling the shotsit’s just as likely that, en route to overseas refineries, as many of those barrels as physically possible will go to terminals like the Enbridge Ingleside Energy Center (EIEC) and South Texas Gateway (STG), both in the Corpus Christi area. – whose docks can receive and load VLCCs with minimal reverse lighting, the most cost-effective way to move massive volumes of oil to Europe and Asia.
But with crude oil pipelines from the Permian to Corpus nearing capacity, more oil is being diverted to Houston-area export terminals via Magellan pipelines, the Midland pipeline system- to-ECHO and other pipes – see Sooner or later i Houston Bound for more information, and Enterprise (in partnership with Enbridge) continues to move forward with its plan to build SPOT in 115-foot-deep waters about 30 miles off the coast of Freeport. In What is needed, we explained that SPOT will have two single-point mooring buoys (purple and white striped diamonds in Figure 1) and the ability to moor two VLCCs simultaneously and load one per day, providing an extraordinary level of cost and time efficiency Crude will flow to SPOT in a pair of 36-inch-diameter pipelines from two Enterprise storage and distribution terminals: the existing ECHO terminal (orange tank icon southeast of Houston; 8.3 Mbbl of storage of tanks) and the proposed Oyster Creek Terminal (orange tank icon north of Freeport; 4.6 Mbbl expected capacity) in south-central Brazoria County.
