Shale oil export operations expanding along Gulf Coast

By North American Shale magazine staff | July 14, 2017

Momentum is building for U.S. shale oil producers looking to increase exports. At the end of May, a 2-million-barrel Very Large Crude Carrier docked at the Port of Corpus Christi for a testing and verification exercise. The docking exercise was used to ensure the VLCC could successfully be loaded with shale oil produced from the U.S. Occidental Petroleum was behind the exercise.

“Permian Basin crude is being exported to Asia, Europre and elsewhere around the world,” said Vicki Hollub, Oxy president. “The arrival of the VLCC at our terminal continues to build on our position as the Permian’s largest oil producer, enabling us to load the largest ships with our crude and the crude of other producers.”

Anne, the ship owned by Belgium-based Euronav, is 1,093 feet long and can hold more than 2 million barrels of oil. Because the depth at the Port of Corpus Christi is only 47 feet, the VLCC has to dock, be partially loaded, and then moved back to deeper water where a different vessel can finish filling the ship. In 2015, the Port of Corpus Christi was the first used in the U.S. after the decades long export ban on U.S.-produced crude was lifted. The largest export vessel to move shale oil from the U.S. was the Suezmax ship that held 930,000 barrels of crude oil.

Charles Zahn, chairman of the Port of Corpus Christi, said his team has a vision to be the energy port of the Americas. In the next decade, the Port intends to invest $1 billion on upgrades, including the widening out of the main channel from 47 feet to 54 feet. And, the construction of the longest cable-stayed bridge in the Western Hemisphere is also underway. The bridge provides increased air draft clearance up to 205 feet.

Oklahoma-based SemGroup is also looking to capitalize on push by U.S. producers to export shale oil. The company has entered into an agreement to purchase the Houston Fuel Oil Terminal Co.’s 16.8 million barrel oil storage terminal located on the Houston ship channel. Carlin Conner, CEO of SemGroup, said the $2.1 billion deal gives the company a larger footprint and better position in the shale oil export business.

“With the addition of HFOTCO, SemGroup will be uniquely positioned to capture the future trends in exporting crude oil and refined products resulting from the near- and long-term anticipated growth in U.S. shale production,” Conner said.
SemGroup already has 7.6 million barrels of oil storage capacity in Cushing and another 8.7 million barrels in the U.K.

The Houston terminal has pipeline connectivity to local refining complexes, deep water marine access and inbound pipeline along with rail and truck receipt capabilities from all of the major U.S. basins.