Houston area to add more oil storage capacity to deal with glut
With available storage facilities for oil filling up in Houston, Fairway Energy Partners said the time is right for the 11 million barrels of crude storage space it’s currently developing.With the current abundance of oil producers and refiners are looking for a space to store it so that it can be ready when the market rebounds. The Houston location will put it in close proximity to the large refineries in the area.
Fairway Energy Partners plans to convert three salt dome caverns more than 2,000 feet under Southwest Houston into crude oil storage. The company, which is backed by Haddington Ventures, is targeting a completion date of late 2016.
“The market in Houston is very tight today,” Christopher Hilgert, CEO of Fairway Energy, said Friday in an interview. “The current tanks in Houston that have been built out are nearly or fully contracted. There’s essentially no spot capacity available in Houston, and the rates are very high right now.”
The latest figures from Genscape Inc. indicate that the Houston has about 63 million barrels of oil stored at terminals and refineries, totaling about 60 percent of capacity. Much of that space is contracted to long-term customers, those looking for a short-term spot to stash their crude could see space as harder to come by.
The Texas Gulf Coast has about 128 million barrels stored at refineries and terminals. It’s also about 60 percent full, Genscape said.