Enterprise Products Partners (EPD) proposed offshore loading platform faces an uncertain future as the company continues searching for potential customers.

Jim Teague, director and co-CEO of Enterprise, gave the update on the company’s Seaport Oil Terminal Export Project (SPOT) during the fourth-quarter earnings meeting on Feb. 4. He blamed a cumbersome permitting process for the terminal’s struggles.

“I believe that SPOT should be the poster child for the need for permit reform,” he said.

In April 2024, Enterprise’s SPOT was the first of four proposed projects to receive a federal permit from the U.S. Maritime Administration—a process that began in 2019.

The SPOT offshore platform would be built about 35 miles off the Southeast Texas coast, close to the Freeport Ship Channel. The facility is designed to simultaneously load two supertankers, each of which can hold 2 MMbbl, at a rate of 85,000 bbl per hour.

Teague cited bureaucratic hurdles as the primary reason for the project’s uncertain status. The project’s initial permit application was 13,000 pages. The final submission consisted of more than 30,000 pages. The public comment period resulted in 80,000 comments the company had to address.

Delays in the permitting process ultimately led to the loss of the project’s anchor customer. The lengthy process also added difficulty as the underlying economics of the project changed, mainly due to the ripple effects from the war in Ukraine, Teague said. The war caused much of the crude otherwise flowing from Russia into Europe to be rerouted.

“When we started that application, it was assumed that the majority of crude exports would go to Asia on VLCCs [very large crude carriers],” he said. “A lot of forecasters were predicting that by 2024, the U.S. would be exporting between 7 million and 8 million barrels a day. Instead, we’re exporting around 4 million barrels a day.”

Exporting crude to Europe can be done economically on smaller carriers, while the SPOT terminal is designed for larger ships bound for Asia.

Enterprise had hoped to announce a final investment decision (FID) on SPOT before the end of 2024. The company, which has the only permit for an offshore loading platform in the U.S., will continue to attempt to commercialize the project, and the company is “laser-focused” on increasing its exports through other channels, Teague said.

Enterprise has a clear picture of the amount of contracted volume and fees needed to move forward on the project, but will drop it within a “reasonable amount of time” if the customer base doesn’t line up.

“This is not a ‘build it and make it come’ project,” Teague said.

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