HOUSTON—Commodities trader Mercuria Energy Group expects to open a new U.S. Gulf Coast crude oil storage facility next year that could compete to become a trading hub for shale oil, the Swiss company’s investment chief said on Dec. 16.
Pin Oak Terminals LLC, a joint venture owned by Mercuria and Dauphine Midstream LLC, is building 2 million barrels of crude storage outside of Corpus Christi, Texas, near where several pipelines connect and other firms have oil storage, said Brian Falik, Mercuria’s chief investment officer for the Americas.
The new Pin Oak hub, which is expected to open mid-2020, could potentially become the main location for crude price assessments for oil shipments through Corpus Christi, Falik said in a phone interview.
No Existing Regional Price
There is no Corpus Christi regional price now like the one that has emerged for pricing West Texas Intermediate crude at the Magellan East Houston terminal, although Argus Media has considered developing such an assessment.
Almost 4.5 million barrels of storage capacity is now under construction outside Corpus Christi, said Andy Lipow, president of consultants Lipow Oil Associates, citing state filings and operators’ announcements.
Corpus Christi’s crude oil loadings have vaulted to more than 1 million barrels per day (bbl/d) this year, briefly surpassing shipments from Houston, which is the most active U.S. Gulf Coast trading hub.
Supply From Red Oak
Phillips 66’s planned Red Oak pipeline is expected to bring additional barrels to the Corpus Christi area from West Texas, North Dakota, Colorado and Cushing, Okla., beginning in early 2021.
Mercuria will begin expanded exports of U.S. crude early next year from the Pin Oak facilities, with a capacity of 320,000 bbl/d. It could double that in 2021, when the Red Oak oil pipeline is expected to come into service.
The Lundin Petroleum board also proposed to change the company's name to Lundin Energy AB, it said in a statement.
The increase in oil and gas bankruptcies seems likely to continue, said Buddy Clark, partner at Haynes and Boone.
Shares of Encana will be suspended from trading on the New York and Toronto stock exchanges on Jan. 27 at which time the company will begin trading as Ovintiv under the “OVV” symbol.