Nine proposed export terminals for Permian crude

Bloomberg/Fuel Fix:

The race to export U.S. shale oil overseas is about to get fierce, with at least nine proposed terminals angling for a piece of a very limited pie.

Within 18 months, new pipelines opening in the nation’s most prolific shale basin promise to carry an added 2 million barrels of oil a day to the Gulf Coast. But the extra crude will arrive at a time when existing terminals in the Corpus Christi area can already offer only about 300,000 barrels a day of unused capacity.

Meanwhile, some of the terminals proposed are being designed to load a supertanker every other day, each capable of carrying 2 million barrels. The result: It’s likely only one or two new terminals are needed, with the edge going to companies such as Enbridge Inc., whose Freeport, Texas, effort could be fed by two pipelines it already owns interests in.

"Anyone can build a terminal," said Chief Executive Officer James Teague of Enterprise Products Partners LP, one of the first companies to export oil from the U.S., in a conference call last month. "But it’s what’s behind that terminal that determines its success."

Or in other words, success in the terminal business is as much about securing the barrels as it is about shipping them out.

U.S. oil exports have soared to nearly 2 million barrels a day since a near four-decade moratorium was lifted in late 2015, just as shale production kicked into high gear. Trafigura Group Ltd. and other trading houses have jumped at the opportunity to send those supplies to Europe and Asia.

But there’s been a problem: Pipeline shortages, particularly in the prolific Permian Basin, have limited how much oil makes it to the coast. Now, anticipating an end to those woes with three major new pipelines expected to open in 2019, several companies -- including Trafigura -- are lining up with plans to provide terminals that can take advantage of the change.

From HoustonChronicle.com: Cheniere Energy kicks off production at Corpus Christi LNG export terminal

Enbridge hasn’t released many details on its proposal for Freeport, which is about 175 miles northeast of Corpus Christi.

But it would likely be fed by the company’s own Seaway pipeline system, which runs south from the U.S. storage hub in Cushing, Oklahoma, as well as the Gray Oak pipeline it owns a stake in. Once completed, that pipe will run southeast from Midland, Texas, in the heart of the Permian, into Freeport and Corpus Christi.
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There is more.

The investment growth to exploit the shale oil coming out of the Permian Basin appears to be growing from new pipelines to new shipping terminals.  It appears it will effect exports from Houston to Brownsville with Corpus Christi getting a significant portion of the action.