Enterprise Products Partners said Tuesday it is teaming up again with CME Group for an electronic auction that would offer domestic crude for export from its Houston Ship Channel terminal.
The auction, to take place April 4, would accept bids for West Texas Intermediate (WTI) light sweet crude using CME’s spot auction platform for export from the Enterprise Hydrocarbon Terminal (EHT).
The auction would be the second since the launch last November of a physically delivered New York Mercantile Exchange (Nymex) WTI Houston Crude Oil futures contract.
“With the recent success of the first-ever electronic auction of U.S. crude oil for export, the market has demonstrated its demand for transparency, efficiency, accurate physical pricing and access to reliable supplies of crude oil with consistent quality standards,” said Enterprise’s Brent Secrest, senior vice president, commercial, for the general partner.
In addition to EHT, the futures contract would offer crude delivery at the Enterprise Crude Houston, i.e. Echo Terminal and the Genoa Junction.
Last fall, CME’s Global Head of Energy Peter Keavy said "Houston's importance as a trading and export hub for physical crude oil from Cushing and the Permian Basin continues to evolve due to the shale oil revolution and repeal of the crude oil export ban...We believe the network of domestic users and location close to export facilities will ensure this contract provides transparent price discovery and risk transfer in the growing Houston region."
Enterprise, which said it is the largest U.S. oil exporter and accounts for nearly 40% of volumes, has a network of 19 ship docks along the Gulf Coast. Through its network of pipelines, storage and marine terminals, the firm can handle the flow of more than 4 million b/d of crude oil. It also has 45 million bbl of crude storage and 18 deepwater docks.