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LOOP test-loading supertanker for US oil export: Update

13 Feb 2018 14:12 GMT
LOOP test-loading supertanker for US oil export: Update

Includes insight on possible freight market impacts.

Houston, 13 February (Argus) — The Louisiana Offshore Oil Port (LOOP) has begun testing its ability to load a very large crude carrier (VLCC) at its US Gulf of Mexico facility after making "minor modifications" to handle bidirectional flows.

LOOP, which is the only US Gulf facility able to directly offload supertankers, last summer began seeking shipper interest in loading crude onto such ships amid explosive growth in onshore production and the legalization of overseas exports in December 2015.

While the use of LOOP for US crude exports may be limited by inbound pipeline-related infrastructure constraints for now, sustained use of the deep-water port for exports would likely increase demand for VLCCs in the region at the expense of smaller vessels that are currently used to transfer oil onto larger ships.

"It might hurt some of the reversed lighterings down to load VLCCs", said a shipbroker.

Aframax and Panamax tankers, which take roughly 650,000 bl and 500,000 bl cargoes, respectively, are currently employed to carry US crude from Gulf coast ports, such as Houston and Corpus Christi, to VLCCs and occasionally Suezmaxes that are waiting in deeper waters in the Gulf of Mexico.

The offshore facility consists of three mooring buoys about 18 miles south of Port Fourchon, Louisiana. Nearby storage has access to offshore production piped to shore, where LOOP operates 72mn bl of storage at the Clovelly Hub, as well as eastbound crude on Shell's Zydeco pipeline.

According to vessel tracking services, the Saudi Arabian-flagged tanker Shaden has arrived at LOOP after offloading a Mideast crude cargo by lightering vessels at Galveston, Texas.