Page 10 - NorthAmOil Week 49

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Enterprise, Enbridge partner on crude export terminal offshore Texas
GULF OF MEXICO
US-BASED Enterprise Products Partners and Canada’s Enbridge have signed a letter of intent (LoI) to jointly develop a crude export terminal in the US Gulf of Mexico, offshore Freeport, Texas.
The terminal would be capable of handling very large crude carriers (VLCCs), which can carry up to 2mn barrels of oil. Currently, the only US port with the capacity to load VLCCs fully is the Louisiana Offshore Oil Port (LOOP), while other ports in the country are generally too shallow to accommodate these supertankers when they are fully loaded. Such ports rely on partial loading and lightering – or ship-to-ship transfers. However, a number of crude export terminal projects have recently been proposed for Texas with the aim of making it possible to load VLCCs off the state’s coast. Not all will go ahead and some players are expected to back out of export projects. Indeed, Carlyle Group said in October it had dropped out of a $1bn crude export terminal near Corpus Christi, Texas. On the other hand, some of the proposals are now progressing towards being built.
Among these is Enterprise’s Sea Port Oil Ter- minal (SPOT), which is the first of the proposed projects to reach the final investment decision (FID) stage. In July, Enterprise announced that it had signed two long-term agreements with Chevron that advanced the terminal project. Under the first deal, Chevron agreed to use Enterprise’s pipeline network to move crude oil from the Permian Basin in West Texas to Enter- prise’s ECHO Terminal in south-east Houston. Under the second deal, Chevron agreed to sup- port the development of SPOT.
Enterprise still needs to receive a deepwater port licence for SPOT, which it anticipates in the second half of 2020. Subject to the receipt of this licence, Enterprise and Enbridge plan to finalise a deal that would provide the Canadian com- pany an option to purchase a stake in SPOT.
Enbridge noted in a statement that it was still also intending to develop a second deepwa- ter export project, Texas COLT, that would be located about 50 miles (80km) west of SPOT.
The partners in Texas COLT submitted an application to the US Maritime Administration (MARAD) in January 2019, and are aiming for the offshore terminal to be in service by 2022.
News of the LoI on SPOT comes shortly after the two companies announced an open season to solicit shipper commitments for a 200,000 barrel per day (bpd) expansion on their jointly owned Seaway pipeline system. The system car- ries crude from the oil hub in Cushing, Okla- homa, to Brazoria County, where Freeport is located.
“We are pleased to be teaming up with Enter- prise to bring large-scale, integrated export solutions to the market,” Enbridge’s CEO, Al Monaco, said in a statement. “This collaboration leverages our jointly owned and highly competi- tive Seaway system and capitalises on each of our capabilities to drive out highly capital-efficient export infrastructure for our customers.”
In October, US maritime officials resumed a licensing review of the proposed SPOT facility after a five-month pause to collect additional information. Once a deepwater port licence is granted, Enterprise expects construction of the SPOT facility to take about two years.™
Enterprise still needs to receive a deepwater port licence for SPOT, which it anticipates in the second half of 2020.
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w w w . N E W S B A S E . c o m Week 49
11•December•2019