August 12, 2019 [Chron] – Dallas pipeline operator Energy Transfer has become the latest company to join the race to build an offshore crude oil export terminal in the Gulf of Mexico.
Energy Transfer is seeking to build a crude oil export terminal capable of supporting supertankers that can carry 2 million barrels of crude, the company’s chief financial officer Tom Long said during a Thursday morning earnings call.
Full details were not immediately available, but Long said the proposed crude oil export terminal would be connected to Energy Transfer’s facility in Nederland, a Jefferson County town about 95 miles east of Houston, as well as the company’s Permian Express pipeline, which moves crude from the Permian Basin oil field in West Texas.
The announcement comes more than a week after Houston pipeline operator Enterprise Products Partners said it has made the final investment decision to build an offshore crude oil export terminal of the coast of nearby Brazoria County.
The large oil tankers, known as very large crude carriers or VLCCs, require 75 feet of water, but the channels of Texas ports have depths of less than 50 feet. Prized by exporters, VLCCs can carry double or triple the amount of crude of the smaller tankers loaded in ports. As a result, at least seven companies are looking at developing offshore crude oil export terminals to accommodate VLCCs.
During the investors call, Energy Transfer President Mackie McCrea said the proposed project was halfway through a process that can take up to three years. The company’s next step is expected to be filing for a permit with the U.S. Maritime Administration.
“We’re very excited about this,” McCrea said. “It’s going to be a great market opportunity for our Nederland and Permian Express systems but also more importantly, for our customers bringing volume into Nederland.”
A joint venture between Marathon Petroleum of Findlay, Ohio; the San Antonio refiner Valero and the European oil major Royal Dutch Shell loaded its first VLCC tanker at the Louisiana Offshore Oil Port, or LOOP, in February 2018. The LOOP was originally built as an import terminal.
Swiss energy trading firm Trafigura is seeking permission from federal regulators to build an offshore crude oil export terminal near Corpus Christi while pipeline operators Enterprise Products Partners, Enbridge and Sentinel Midstream are seeking permission to build separate projects near Houston.
Founded in 1995, Energy Transfer has nearly 11,800 employees across the United States and Canada. The company reported a second quarter profit of $878 million profit, more than doubling the $355 million earned in the second quarter of 2018. Revenues slipped to $13.9 billion from $14.1 billion.
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