Largest U.S. crude and condensate exporter in 2017 is behind the project

From Offshore Technology

Multinational commodities trader Trafigura has applied for permission to build a deepwater oil port in Texas, US, capable of accommodating supertankers, in order to increase US oil export infrastructure.

There are currently no inland ports in the U.S. that can fully load very large crude carriers (VLCCs) – vessels capable of carrying more than two million barrels of oil – and transport is currently done through ship-to-ship transfers.

A Trafigura spokesperson told Offshore Technology: “The Texas Gulf Terminals Project is a new offshore Deep Water Port facility that will allow VLCCs and other tankers to load cargo safely, directly and fully via a single-point mooring buoy system (SPM).

“Using SPMs eliminates unnecessary ship traffic in inland ports as well as the “double handling” of the same crude oil, reducing the opportunity for spills and emissions each time the crude oil is transferred.  Once constructed, this globally-proven technology, will ease infrastructure barriers to crude oil exports, grow the U.S. economy, and support jobs.”

According to the company, the proposed deepwater oil port would include a new onshore terminal connected via a pipeline, close to the Corpus Christi port. The SPM would have a capacity of 500,000 barrels per day (bpd).

The US trades more than two million bpd of crude. Production output reached 11 million bpd for the first time last month, making the US the second largest producer in the world after Russia.

Trafigura US director Corey Prologo said the new port would give US oil producers greater access to VLCCs, “making sure that the industrial and employment advantages of accelerating home crude manufacturing can also be absolutely realised”.

Crude exports from the US resumed in 2016 after a ban was lifted, so while production is rising, the current infrastructure cannot keep up. A prime example of this is the current issue of pipeline bottlenecks in the Permian Basin in Texas.

Trafigura applied for the new deepwater oil port last month through its subsidiary Texas Gulf Terminals. The spokesperson added: “Timing for operations to start is to be decided as we have just begun the permitting process under the Deep Water Port Act.”

The company was considered the largest US crude and condensate exporter in 2017.

Other corporations are said to be exploring similar options. US-based Endeavor Product Companies said last month it was also designing an offshore terminal in Texas capable of loading one VLCC per day.

From the Corpus Christi Caller Times

Oil Export Facility Could Circumvent Port of Corpus Christi

The Port of Corpus Christi has a lot of activity going on in its ship channel as the nation’s largest exporter of crude oil.

So one company is looking to take its ability to export crude oil offshore.

Trafigura U.S. Inc., a privately held physical trading and logistics company with offices in Houston, announced on Monday its intention to build a new offshore deepwater port facility in the Gulf of Mexico, which will be called the Texas Gulf Terminals Project. The proposed facility would allow Very Large Crude Carriers — capable of carrying 2 million barrels of crude oil — to be fully loaded through a single-point mooring buoy system.

It will be moored about 15 miles offshore from Corpus Christi, officials said.

“The Texas Gulf Terminals Project will give U.S. crude oil producers, particularly Texas operators, safer, cleaner and more efficient access to very large crude carriers, ensuring that the economic and employment benefits of increasing domestic crude production can be fully realized right here at home,” said Corey Prologo, director of Texas Gulf Terminals Inc. and director of Trafigura, North America.

A permit application for the project was submitted to the Marine Division of the U.S. Department of Transportation on July 9. Trafigura representatives said in its statement that the single-point mooring buoy system reduces the opportunity for spills and emissions each time crude oil is transferred by eliminating “unnecessary ship traffic” in ports and “double handling” of the same crude.

Crude oil will be shipped via pipeline from an onshore terminal to the single-point mooring buoy system, from where VLCCs will be able to fully load their cargo.

The Texas Gulf Terminals Project is the latest long-term investment from Trafigura, who most recently made a nearly $1 billion investment in the marine export terminal and condensate splitter in Corpus Christi for Buckeye Partners L.P. The upgrades allowed Buckeye to make its first shipment of crude oil by a Suezmax tanker — which can carry 1 million barrels of crude — from its Texas Hub terminal in the Port of Corpus Christi in April.

The port is in the midst of widening and deepening the Corpus Christi Ship Channel, which will deepen it to 54 feet and allow for two-way traffic. The $327 million project is a joint venture between the U.S. Army Corps of Engineers and the port, with the federal government expected to pick up the lion’s share of the cost.

While the expansion of its ship channel will allow for a greater volume and variety of goods going through the port, it will not be deep enough to fully accommodate VLCCs. The vessels could be partially loaded in the channel, then the rest of the crude would be ferried out to the carrier in the Gulf of Mexico, which results in added expenses.

The port has instead sought to deepen a portion of the ship channel further, from the entrance to the La Quinta Junction, to 75 feet in order to fully load VLCCs. Sean Strawbridge, CEO of the Port of Corpus Christi, has previously said that the port was opposed to an offshore buoy system like what Trafigura is proposing for environmental and security reasons.

“We’re not supportive of an offshore buoy platform due to the environmental and security risks associated with it,” Strawbridge said.

“It’s a known environmental hazard to do it offshore,” he added.

Officials with Trafigura said that with U.S. crude oil exports projected to surge in the next five years, up to 4.8 million barrels per day by 2022, there is a need to have additional infrastructure capable of handling the projected growth.

The proposed Texas Gulf Terminals Project will handle only about 10 percent of the expected growth in U.S. oil production, and will “complement, not replace,” Port of Corpus Christi exports, company officials said.

The system proposed by Trafigura is similar to one pitched by an opposition group — Port Aransas Conservancy — last month as an alternative to the port’s 75-foot dredging project for a Harbor Island terminal for VLCCs. Strawbridge, during a July 19 Port Aransas City Council meeting, said that the port would not get behind such a proposal for a number of reasons.

Those included concerns about the amount of crude vapors released into the atmosphere from the vessels as they are being loaded, which Strawbridge said is regulated more stringently in the port than when a vessel does so in federal waters and outside the state’s purview. He also mentioned concern about the response time to address any spills that may occur.

“Today, those vessels are going offshore, outside of state waters, and they’re reverse lightering — so they’re taking products from smaller ships, loading them onto the larger ships,” Strawbridge said. “Within state waters and on land, when we do all this … all of those vapors are sequestered, they’re captured through what’s called vapor recovery systems. That’s required by state law.”

“When you go outside the state waters, they’re just releasing those vapors into the atmosphere, so today, that activity is already having a negative impact on the environment,” he added.

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