Big tankers can fit in
Port may compete with Houston, Corpus Christi for oil exports
Louisiana’s LOOP could have an edge against Texas ports if it starts exporting oil.
A proposed Louisiana project could define thethe future of the Texas sh ale boom, a report says.
While Houston and Corpus Christi are leading the way in exporting crude, they could be surpassed by plans to turn the Louisiana Offshore Oil Port, or LOOP, into an export center, as well as one the receive soil imports. The LOOP is seeking customersfor U.S. oil, and if interest isn’ t there, it will delineate the“ceiling on international demand for sh ale crude ,” said Sandy Field en, Morning star’ s director of oil and products research.
“That ceiling could po sea greater constraint on future production than lower prices or OP EC production cuts ,” Fielden concluded.
LOOP only imports crude, moving foreign oil to pipe lines that ship it to refineries, so the 36-year-old-port’splan to get into the export business is another example of how the shale revolution has re shaped the global energy industry and Gulf Coast economy. Instead of sending billions of dollars overseas to buy crude oil, the nation is now shipping it to foreign markets. Since Congress lifted the ban on crude export sat the end of 2015, U.S. crude exports have grown from about than 500,000 barrels daily in 2016 to almost 1 million per day this year, according to the U.S. Energy Department.
At the same time, terminals once planned to accept liquefied natural gas from foreign shippers have become export facilities. The U.S. energy industry’ s capacity to export LNG is set to increase nearly seven fold over the next three years as companies bring gas super-cooling facilities into production.
The United States has exported more gas than it imported over the past few months, a trend the E IAexpects to continue for there st of this year and next. The advent of sh ale drilling has raised the nation’ s natural gas production by a third since 2008.
LOOP tookin 900,000 barrels ada yin 2010, but that has fallen to under 600,000 barrels daily. Because of the nation’ s falling reliance on a growing percentage of the oil LOOP receive snow comes from Texas and the deep-water Gulf of Mexico.
While most of the country’ s crude exports leave Corpus Christi, the problem is that Texas’ t accommodate the biggest tankers carrying full loads. They’ re mostly spending more time and money to use smaller vessels and then trans fe ring those car goes to the tank er class called very large crude carriers, or V LC C.
The first V LC C to enter Corpus Christi did so in May for testing purposes, but such vessels can’ t take even close to full cargo loads until terminal modifications are completed over a couple years or so.
LOOP’ sad vantage is it can already handle the largest oil supertankers, the only Gulf Coast terminal with that capability.Exporting from LOOP would lower freight costs and allow for the blending of different crude grades to meet specific customer because of LOOP’ sc rude storage hub.
Still, Houston and Corpus Christi remain well situated because they, and not LOOP, are best connected to pipe lines from West Texas’ Permian Basin, where the oil boom is focused, Field en noted.