HOUSTON—Pipeline operator Enterprise Products Partners LP signed long-term agreements with Chevron Corp. that advance its proposed offshore crude project in the U.S. Gulf of Mexico, the companies said on July 30.
Enterprise’s Sea Port Oil Terminal, or SPOT, is one of at least eight similar projects off the Texas and Louisiana coasts proposed to export oil from the region’s shale fields.
It would compete with projects under development by commodities trader Trafigura Ltd., private equity firm Carlyle Group and pipeline operators Magellan Midstream Partners, Tallgrass Energy LP and Phillips 66.
All the projects aim to carry rising shale production from the Permian Basin of West Texas and New Mexico to overseas markets. A total of 2.3 million additional barrels per day of shale is expected to reach the U.S. Gulf Coast in the next year as volumes rise and new pipelines begin operation.
Enterprise declined to say whether Chevron would take a financial stake in the project, or whether Chevron would become a customer for a Permian crude pipeline that it calls Midland-to-Echo 3. Chevron was unavailable to comment.
The value of the agreements was not disclosed. Enterprise is due to release its second-quarter results on July 31 and could provide more details then, spokesman Rick Rainey said.
Chevron agreed to use Enterprise’s crude oil transportation, marine terminals and storage facilities, which include its Houston storage facilities, the companies said.
SPOT is planned for a site in 115 feet of water, about 40 miles off the coast of Houston. Up to two very large crude carriers (VLCCs) could moor at the site and load up to 2 million barrels per day.
The facility would connect to an onshore tank farm able to hold up to 4.8 million barrels of crude oil, according to its federal permit application.
Construction of the project is subject to the required approvals and licenses from the federal Maritime Administration, which is currently reviewing the application.
Recommended Reading
BP Restructures, Reduces Executive Team to 10
2024-04-18 - BP said the organizational changes will reduce duplication and reporting line complexity.
Marathon Chasing 20%+ IRRs with Los Angeles, Galveston Refinery Upgrades
2024-02-01 - Marathon Petroleum Corp. is pursuing improvements at its Los Angeles refinery and a hydrotreater project at its Galveston Bay refinery that are each boasting internal rate returns (IRRs) of 20% or more.
Air Products Sees $15B Hydrogen, Energy Transition Project Backlog
2024-02-07 - Pennsylvania-headquartered Air Products has eight hydrogen projects underway and is targeting an IRR of more than 10%.
Air Liquide Eyes More Investments as Backlog Grows to $4.8B
2024-02-22 - Air Liquide reported a net profit of €3.08 billion ($US3.33 billion) for 2023, up more than 11% compared to 2022.
Some Payne, But Mostly Gain for H&P in Q4 2023
2024-01-31 - Helmerich & Payne’s revenue grew internationally and in North America but declined in the Gulf of Mexico compared to the previous quarter.