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LOOP loading supertanker for US export: Update 2

13 Feb 2018 23:03 GMT
LOOP loading supertanker for US export: Update 2

Adds Shell as purchasers of LOOP-loaded sour crude this week.

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.

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.

Shell was expected to load up to 1.5mn bl of sour crude onto a VLCC at LOOP this week, according to sources.

LOOP's onshore storage facilities include segregated storage for US Gulf sour crudes Mars and Thunder Horse, a comingled cavern for three Mideast sour grades, a comingled light cavern that can include WTI, Eagle Ford and Bakken, as well as the LOOP Sour cavern that comingles Mars, US Gulf sour Poseidon, and Mideast sour grades.

Shell — which co-owns LOOP along with US independent refiners Valero and Marathon — is a large producer of Mars stream crude, which has been exported in the past using reverse lightering.

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.