Page 6 - NorthAmOil Week 02

NorthAmOil COMMENTARY NorthAmOil
Crude exports out of Corpus Christi hit record high
An infrastructure build-out is helping to push crude exports from Corpus Christi on the Texas Gulf Coast to new record highs
TEXAS
WHAT:
Crude exports from Corpus Christi are reaching new highs.
WHY:
An infrastructure build-out in the area is underway as new pipeline capacity from the Permian Basin starts up.
WHAT NEXT:
More players are backing out of proposals to build crude export terminals on the Gulf Coast amid intensifying competition.
CRUDE exports from Corpus Christi on the Texas Gulf Coast are booming. Infrastructure developers are rushing to accommodate grow- ing volumes of oil arriving in the region from the prolific Permian Basin, much of it heading to overseas markets.
Thanks to this build-out of infrastructure, crude exports out of Corpus Christi reached a new weekly high of 1.59mn barrels per day (bpd) in late December. According to ClipperData, a vessel-tracking firm, this was higher than Hou- ston’s 2019 peak of 1.36mn bpd, as well as more than double the levels being shipped out of Cor- pus Christi during the first eight months of the year.
“Those [export] numbers are truly aston- ishing, and at times, Corpus volumes have accounted for more than half of all crude exports moving out of the US on a weekly basis,” an Uplift Energy Strategy senior strategist, John Zanner, was quoted by Reuters as saying.
Data from the US Energy Information Administration (EIA) show that the four-week average for overall crude exports from the US reached a record 3.72mn bpd in the week up to December 27.
On the rise
US crude exports – and indeed flows to Cor- pus Christi – are anticipated to grow further still as additional pipeline capacity out of the
Permian Basin comes online over the coming year. Indeed, Permian pipeline capacity already exceeds supply, but is set to keep increasing even as output growth in the basin slows.
Upcoming capacity additions include EPIC Midstream’s crude pipeline, which is due to enter service in the first quarter of 2020. EPIC tempo- rarily converted its natural gas liquids (NGL) pipeline to crude service last year amid an oil takeaway capacity crunch in the Permian. The NGL pipeline can ship up to 400,000 bpd of oil from Crane, Texas to Corpus Christi and Ingle- side. The company will be able to ship higher vol- umes once its crude pipeline – with a capacity of up to 600,000 bpd and the possibility to expand it to 900,000 bpd further down the line – starts up.
Meanwhile, Phillips 66 is due to ramp up its recently launched 900,000 bpd Gray Oak pipe- line to full service this quarter.
Major new pipeline capacity additions have been coming online since the second half of 2019, starting with Plains All American Pipe- line’s Cactus II pipeline, which has a capacity of 670,000 bpd and entered service in mid-Au- gust. EPIC began interim crude service on its NGL pipeline the same month, and Gray Oak was launched in late November. The start-up of these pipelines led to concerns that the bottle- necks affecting the Permian Basin would simply be moved to the Gulf Coast, and specifically the Corpus Christi area, where developers were
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w w w. N E W S B A S E . c o m Week 02 15•January•2020