Competition is heating up to build crude oil export projects along the Texas coast, with Sentinel Midstream the latest to enter the fray.
The Dallas-based midstreamer on Monday launched a proposal to build Texas GulfLink, an offshore oil export terminal near Freeport capable of exporting up to 85,000 b/d with nominal capacity of 1.2 million bbl a year.
The terminal would be able to very large crude carrier (VLCC) vessels, considered a necessity for oil exports.
"Texas GulfLink will provide the United States with an economical solution to clear the over-supply barrels destined for the Gulf Coast," Sentinel CEO Jeff Ballard said. "We have compiled a team of industry leading professionals who possess unique experience in construction and operations of deepwater ports and are well positioned to leverage that experience as prudent operators.”
Texas GulfLink would include an onshore terminal with up to 18 million bbl of storage, an offshore 42-inch diameter pipeline and a manned offshore platform to allow port operations with two catenary anchor leg mooring, single point mooring buoys.
Over the past year, Texas GulfLink was developed with “multiple stakeholders, including federal, state, and local agencies,” Ballard said. The project has secured “necessary commercial support” to justify the capital investment and is preparing to submit a formal permit with the U.S. Maritime Administration.
Project financing is being provided by Cresta Fund Management, also based in Dallas, which was formed last year.
"We view the company's value proposition, which provides a neutral infrastructure solution without the inherent conflicts of affiliated marketing, as the best approach to support the interests of U.S. producers and lead to the greatest outcome for all stakeholders,” Cresta managing partner Chris Rozzell said.
Further south near Corpus Christi, where some of the major crude lines from the Permian Basin are to terminate, the U.S. Army Corps of Engineers in January awarded its first contract for the Corpus Christi Ship Channel Improvement Project. The export hub in Ingleside, TX, in the northeast corner of the Port of Corpus Christi, can partially load a VLCC, as can the Seaway export hub, a joint development between Enbridge Inc. and Enterprise Product Partners LP.
The deepening of the ship channel in South Texas comes as midstreamers that include Enbridge and its partners, as well other projects including one by Trafigura Group Pte Ltd., seek to expand exports along the Texas coast.
Enterprise also has an export terminal on the drawing board for offshore Texas that could load VLCCs with up to 2 million bbl of capacity. Initial work was underway late last year for permitting.
Fully loading a VLCC in the United States now requires multiple ship-to-ship transfers, aka STS, which are performed in lightering zones out to sea. The Louisiana Offshore Oil Port, aka LOOP, can accommodate fully loaded VLCCs in its lightering zone.