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Oxy to boost Texas export terminal capacity

06 Mar 2018 15:28 GMT
Oxy to boost Texas export terminal capacity

Houston, 6 March (Argus) — Occidental Petroleum is planning to more than double capacity at its Ingleside terminal at the port of Corpus Christi in Texas, amid strong interest in exporting US crude.

The terminal will expand from 300,000 b/d to 750,000 b/d by the second half of 2019, said senior vice president of marketing and midstream operations Cynthia Walker.

The terminal's Very Large Crude Carrier (VLCC) loading arms will be turned on by the end of this year, allowing it to partially load the larger ships, she said at the CERAWeek conference in Houston, Texas.

Oxy last year docked a VLCC at the port for testing. That ship did not load any crude.

Occidental currently exports about 250,000 b/d of Permian basin crude from the Ingleside terminal. About one-third is exported to Asia, one third to Europe and one third to Canada and Latin America, Walker said.

The Port of Corpus Christi, which is already authorized to dredge to a 52ft draft, would need to go down to about 70ft to accommodate fully loaded VLCCs. But unlike other ports in the region, the waters off of the coast from Corpus get deep quickly, meaning the port would have to dredge less than three miles of channel to connect the US Gulf to Harbor Island in Corpus.

Until the, a terminal could partially load a VLCC and then finish filling it up by reverse lightering on the open sea using smaller vessels. Previous VLCC exports have relied solely on reverse lightering, but partial loading at the dock would reduce the number of expensive lightering trips needed.

The expansion of the Ingleside terminal comes amid increasing interest in exporting light crude from the Permian basin in west Texas and eastern New Mexico.

US crude exports in December averaged about 1.5mn b/d with Canada and China as the top two destinations, according to the most recent trade data by the Census Bureau. The agency will release January trade data tomorrow.

Walker predicted that US crude exports will increase by 700,000–800,000 b/d by the end of this year.