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Enterprise reportedly considering selling Texas oil terminal stake
TEXAS
US midstream player Enterprise Products Part- ners is reportedly seeking to sell its 50% stake in Eagle Ford Terminals Corpus Christi, a recently completed crude export terminal in South Texas. Enterprise partners with Plains All American Pipeline in the project, but has also proposed building its own oil export facility in waters o the Texas coast.
Reuters reported this week that it had seen a marketing document con rming that Enterprise was seeking a sale. e document reportedly did not specify a price but said that the company had hired RBC Capital Markets to advise on any transaction. Neither Plains nor Enterprise had commented on the news as of press time on June 20. Reuters noted that RBC also declined to comment.
The Eagle Ford Terminals Corpus Christi joint venture is connected to the partners’ 660,000 barrel per day Eagle Ford JV pipeline, which carries crude from the Permian Basin and Eagle Ford shale plays to the US Gulf Coast. e terminal’s dock will be able to partially load very large crude carriers (VLCCs) once a pro- ject to dredge the Corpus Christi ship channel is completed next year. is comes as a number of developers are scrambling to enable VLCCs to be fully loaded at new and existing ports on the Gulf Coast. Currently, the Louisiana O shore Oil Port (LOOP) is the only US port capable of fully loading the super-tankers, which can hold up to 2 million bpd of crude.
The Eagle Ford Terminals Corpus Christi project can load up to 40,000 barrels per hour and has four storage tanks with a combined 1.4 million barrels of storage capacity. ere is scope to expand the terminal’s storage capacity to 5 million barrels.
But Enterprise filed to build its own
deepwater export terminal in January. e pro- posed Sea Port of Texas (SPOT) project would be located 40 miles (64 km) off the coast of Houston.
A Morningstar analyst, Sandy Fielden, told Reuters that it was unclear whether the Eagle Ford Terminals Corpus Christi project would be able to compete with larger facilities being built in the same area. He added that Enterprise already has a much larger presence in Houston than in Corpus Christi.
Enterprise’s SPOT is one of at least nine deep- water oil ports proposed for the Gulf Coast, as operators seek to accommodate rising exports of oil produced from the US’ shale plays. (See: Phillips 66 enters race to build crude export termi- nal, Page 10) However, even with new pipelines under development from the shale plays of Texas to the Gulf Coast, which are anticipated to add roughly 2 million bpd of capacity by mid-2020, not all of the proposed terminals will be needed.
e developers of the terminals hope that a trade deal between the US and China could help boost overseas demand for US crude. Chinese imports of US oil have fallen dramatically amid the trade war between the two. According to the US Energy Information Administration (EIA) the US exported 4.7 million bpd of crude and petroleum products to China in March, down from 18.4 million bpd in the same month of 2018.
But terminal developers remain con dent that Asian demand for US crude will keep growing. Indeed, according to the marketing document seen by Reuters, Enterprise estimates that around 50% of US Gulf Coast exports from 2018 reached Asian destinations. e company projects that US crude exports could reach 8 million bpd by 2025, up from around 3 million bpd currently.™
The Eagle Ford Terminals Corpus Christi joint venture will be partially able to load VLCCs once the Corpus Christi Ship Channel has been dredged.
Enterprise’s SPOT is one of at least nine deepwater oil ports proposed for the Gulf Coast.
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