Global commodities trader Trafigura said Feb. 28 it had formed a joint venture with U.S. refiner Phillips 66 to build a major deepwater port in Texas capable of handling supertankers, ditching its own competing project.
The Bluewater Texas Terminal, to be located 21 nautical miles east of the entrance to Corpus Christi port, will have two single point mooring buoys that can load Very Large Crude Carriers (VLCCs), each capable of carrying about 2 million barrels of oil.
Geneva-based Trafigura, the biggest U.S. crude exporter handling about 600,000 barrels per day (bbl/d), said it had withdrawn its Texas Gulf Terminals project submitted to the U.S. Maritime Administration (MARAD) in July 2018.
The U.S. became a crude exporter in early 2016 after a decades-long ban was lifted but infrastructure has lagged behind the country's sky-rocketing shale production. The country is now the world's biggest crude producer at 13 million bbl/d with exports averaging about 3.4 million bbl/d for the last four weeks, according to the U.S. Energy Information Administration.
Severe pipeline bottlenecks out of the Permian Basin, the biggest in the U.S., have improved with the start of three major pipes last year but export terminals capable of handling supertankers are still in short supply.
A flurry of port projects have been proposed to fix the gap.
Phillips 66, the fourth-largest U.S. refiner, first proposed Bluewater terminal in July. At the time, at least eight other projects had already been announced.
A final investment decision is expected to be made this year, the statement said. Once built, the terminal will be capable of loading tankers at a rate of between 40,000 and 80,000 barrels per hour or about 16 VLCCs per month.
U.S. maritime officials suspended Phillips 66's application for a U.S. Gulf Coast deepwater export terminal, seeking additional information in November.
"By easing infrastructure barriers, the Bluewater Texas Terminals project will help the Permian Basin region produce and export more crude oil, grow the U.S. economy and support Texas jobs," said Corey Prologo, director of oil trading North America for Trafigura.
Crude oil inventories also hit another record high on the U.S. Gulf Coast, where the bulk of the nation's refining capacity is located.
Mars Sour, the benchmark for sour U.S. Gulf Coast grades, was trading at a $1.05 premium to U.S. crude futures on July 1.
Demand for energy storage has soared as the COVID-19 pandemic crushed fuel demand, spurring oil producers and traders to fill storage facilities across the U.S.