The Port of Corpus Christi in Teaxs on the Gulf of Mexico is already the U.S.’s top oil export port. It sits between the Permian Basin and Eagle Ford which together produce about 4.7 million bpd, nearly half of the total U.S. production. However it needs to expand to take full advantage.
The Port of Corpus Christi in Teaxs on the Gulf of Mexico is already the U.S.’s top oil export port. It sits between the Permian Basin and Eagle Ford which together produce about 4.7 million bpd, nearly half of the total U.S. production. However it needs to expand to take full advantage.
The rapid expansion of the Texas shale basins has meant transport and pipelines have not been able to keep up with getting the production out causing bottlenecks and seeing the Midland price trade at record discounts to the WTI price because of the transportation costs.
Corpus Christi Port officials are expected to consider $300 million in financing that would prepare the port to handle the record shale production over the next five years. There are two factors the terminals were originally designed for imports only with the U.S. able to export crude oil a recent allowance. The other factor is the existing port is too shallow for the larger oil tankers preferred by China and other oil buyers.
Source: NorthAmericanShaleMagazine
The Port of Corpus Christi Commission will vote on Tuesday on a plan that would authorize it to raise the debt next month through underwriters led by Wells Fargo & Co, Citigroup Inc and JPMorgan Chase & Co.
The port is hopeful the federal government will cover the costs of widening and deepening the port. If not it will levy new user fees for the debt costs. Reuters reports that a decision to raise fees for dredging would be rare among U.S. Gulf Coast ports.
“We don’t want to be the next bottleneck” to U.S. oil exports, said Sean Strawbridge, chief executive of the Port of Corpus Christi Authority.
The United States exports more than 2 million barrels of oil a day at record amounts and is producing oil at all time highs. The issue is exports are handicaped as the largest tankers only have a Louisiana offshore port that is deep enough.
Source: RonH @RonH999
Corpus Christi exports 800,000 barrels per day (bpd) of crude, the channel’s existing 47-foot-depth restricts it from fully loading crude tankers that carry up to 1 million barrels. Smaller vessels must finish loading the tankers offshore Strawbridge said.
The project will deepen the channel to 54 feet for larger tankers, he said. Oil export capacity from the Corpus Christi area is expected to rise to 3.3 million bpd by 2021 from 1.3 million bpd this year, keeping its rank as the top oil export port, according to energy research firm Wood Mackenzie.
Reuters reported that the South Texas port received $36 million from the U.S. federal government to start work on a $335 million expansion that would allow Corpus Christi by 2021 to accept tankers with capacity of 1 million barrels of oil . The port contributed another $44 million and aims to use that money and the debt to expand the ship channel.
Source: RonH @RonH999
“To continue to compete against OPEC, over time we have to have a better system of getting the oil offshore,” said Sandy Fielden, an analyst at equity research company Morningstar.
Time is of the essence for the Port to be able to service the nearby production and for the U.S. to fully take advantage of higher oil prices and opportunities that have come about since OPEC has limited production to get oil prices higher. With the current trade wars exports are paramount to the United States. Indeed in the recent tariff tit for tat China said they will put tariffs on U.S. Oil and LNG.
Source: Reuters
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