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GULF IN CLASS MIDSTREAM • MARKET TURMOIL AND THE HEALTH CRISIS WILL NOT STOP US TERMINAL OPERATORS DEVELOPING THE INFRASTRUCTURE THAT IS NEEDED
IN THE SPACE of little more than a decade, the US oil and gas industry has been completely transformed as a result of the intensive exploitation of tight reserves – shale oil and shale gas in particular. The turnaround from the position of the country as a major oil importer to one of the most significant exporters has been dramatic, helped in no small part by a light government touch and massive investment on the part of the midstream sector – often underpinned by fund managers with a keen eye on the prospects. To start with, the immediate need was to install a country-wide network of oil and gas gathering and processing facilities, to collect
the new output and get it to where it was needed. New oil and gas hubs sprang up as the country began to be criss-crossed by new pipeline networks, helping move production out of what were often new territories for the oil and gas industry. Over the past two years, however, the focus has moved very much towards building export capacity, as domestic production is now outstripping local demand. And that focus has, by and large, returned to the oil patch’s old home on the Gulf Coast, and in particular the stretch from Corpus Christi, Texas to the Mississippi Delta in Louisiana. The high-profile developments have been in
crude oil but there have also been interesting investments in the chemical sector and in downstream petrochemical gases. OPEN UP TO CORPUS The new South Texas Gateway (STG) project in Corpus Christi, Texas is just the latest opening. Operator Buckeye Partners put the terminal into operation in mid-July this year, after the first deliveries of crude oil from the Permian basin via one of four pipelines that will serve the terminal. STG is located in Ingleside, near Buckeye’s existing terminal operations in the port, and is a joint venture between Buckeye, which owns 50 per cent, and affiliates of Phillips 66 and Marathon Petroleum, which each have a 25 per cent holding. Once fully operational in the first quarter of 2021, STG will offer 8.6m bbl (1.37m m³) of tank storage, although there is the space to expand capacity to 10m bbl. Two docks will allow loading at up to 800,000 bbl per day and are capable of handling very large crude carriers (VLCCs). “South Texas Gateway represents a significant investment in the Port of Corpus Christi and a long-term commitment to our customers,” says Khalid Muslih, executive vice-president of Buckeye GP and president of its Global Marine Terminals. The opening of STG came three months after Moda Midstream put 10m bbl (1.59m m³) of crude oil export capacity into service at the Moda Ingleside Energy Center (MIEC) in Ingleside and its nearby smaller terminal in Taft, Texas. The two facilities now offer some 12.0m bbl of combined capacity. Construction of another 3.5m bbl at MIEC has begun, which is expected in service later this year, while Moda has permits for more storage at both sites and is in discussion with its customers. Again, the expansion has been enabled by the commissioning of new pipeline connections to bring crude oil from the Permian and Eagle Ford basins. Also in Corpus Christ, EPIC Crude Holdings brought its IGC terminal into service at the end of 2019; this repurposed facility is designed to act as a crude oil export terminal
HCB MONTHLY | SEPTEMBER 2020
