I'm Jordan Blum, editorial director with Hart Energy here at CERAWeek by S&P Global, and I'm joined by Sean Strawbridge, CEO of the Port of Corpus Christi.
Jordan Blum, editorial director, Hart Energy: So the Port of Corpus Christi has generated a lot of news in recent years. I mean, can you just explain how the Port has emerged as the top oil exporting gateway in North America?
Sean Strawbridge, CEO, Port of Corpus Christi: Well, we have the fortuitous proximity to two of the largest energy producing fields in the nation, the Eagle Ford Shale and the Permian and Delaware basins. So we're a natural tributary, a natural outlet for that production. You know, in the energy space, it's what I call the four P’s. It's production, it's pipelines, it's processing and it's ports to move those goods to the demand centers that need it. And it just so happens that the Port of Corpus Christi, when you think about our proximity to those large energy producing fields, we are the natural tributary.
JB: It seems like y'all are setting new records every month. Can you elaborate on some of those successes, those volumes?
SS: Well, we're certainly grateful for the investments that our customers have made. Our customer base has grown tremendously and the assets that they have invested in and operate have also grown tremendously since the crude export ban was lifted in late 2015. So from that perspective, we continue to invest in the base infrastructure to support their investments. One primary example of that is the improvement of the Corpus Christi Ship Channel. Now, that's a project that will be completed late in 2024, which will render the Corpus Christi Ship Channel the deepest and the widest in the entire U.S. Gulf. And in the case of most commodities and transportation of those commodities, bigger is certainly better. So this will optimize the vessels that are calling Corpus Christi, certainly the larger vessels that can't fully load today. So we're excited about that type of an investment. We also continue to invest in more roads, more rail, more pipeline corridors as we anticipate not only continued growth in LNG exports, but certainly when we talk about some of the energy transition initiatives as well.
JB: Now with regard to the deepening and reducing a lot of what you call, I guess reverse lightering from the big tankers, is there any concern about some of these other projects that kind of have the blueprints up for these deepwater oil exporting?
SS: Well, you know, optimizing those vessels by being able to fully load them is really key. And right now there's some suboptimal operations, as you said, reverse lightering. The VLCCs, the very large crude carriers, can't be fully loaded today. And that's the reason for the reverse lightering, which is shuttling the remaining cargoes out and transferring them to the larger vessels in open water. That causes more emissions. It certainly is more cost for our customers and for their customers. So being able to have outlets and facilities that can fully optimize those vessels, that's really going to be key.
The question is going to be who's going to do that first and how much business will that drive? There's multiple offshore buoys or single-point mooring facilities that have been announced. None of them have been fully permitted at this point. There's still a lot of permitting review, and that's why when we talk about regulatory reform, not only for garden variety infrastructure projects like bridges and seaports but certainly in the energy space, we've got to do more to optimize the permitting process. That means either permitting reform through a legislative solution or bringing some accountability to these federal agencies with the tools they already have in place so they can shrink that timeframe and bring more certainty to the markets. And even if that means a faster decision, that may be an opportunity to then improve the robustness of the environmental reviews because ultimately a lot of these are now ending up in court and you want to make sure that they can withstand litigation.
JB: We're talking a good bit about crude oil exporting, but Corpus Christi's also becoming a big LNG hub as well. Can you elaborate on that?
SS: We're number one in crude oil exports in the nation with about 60% market share. We're number two in LNG exports and we're number three in refined product exports. So that basket combined makes us the largest single gateway for American energy exports in the United States. But we also are looking at ways that we can not only improve the infrastructure for more of the traditional energy exports, like LNG, of which Chenier is increasing their liquefaction capacity with their phase three expansion. But we also have an eye towards the future and some of the energy transition initiatives. When we talk about energy transition, it's going to be the oil and gas companies that have the expertise, the engineering prowess and certainly the infrastructure. They're going to be the constituency that's going to lead any of the transition initiatives.
JB: So in that vein, can you elaborate at some of the things y'all are looking at and doing with hydrogen, with carbon capture?
SS: Certainly hydrogen and carbon capture, we think they go hand in glove. All of our customers have made decarbonization commitments to their shareholders. It's what societies want, it's what governments want. And what we've viewed as an opportunity for us as infrastructure developers—and most port authorities are just that—they develop and manage base infrastructure for the facilitation of goods movement—we see carbon capture as another tool to bring more investment, large-scale industrial investment to the region. And when you talk about hydrogen production, hydrogen derived from hydrocarbons, with the associated carbon capture apparatus, is really going to be the low-hanging fruit in the near term when it comes to energy transition.
Longer term, we all have ambition for a zero carbon intensity hydrogen molecule. But you know, that takes a lot of water, it takes a lot of renewable power, and I'm not sure that we're just there yet.
JB: Thank you so much for taking the time to join us. For more information, please read online at hartenergy.com.
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