The Port of Corpus Christi, about 200 miles south of the energy capital of Houston, is expected to emerge over the coming decade as the nation’s No. 1 crude export hub because of major investments in shipping facilities and pipeline infrastructure, according to Wood Mackenzie.
The research firm in a report Tuesday said Lower 48 oil production volumes could increase by 4 million b/d in the next five years, with a significant portion headed to the South Texas coast via Permian Basin pipeline projects.
“More than 2 million b/d of pipeline capacity between the Permian Basin and Corpus Christi is currently under construction and is due to come online within the next eight to 12 months,” said researchers. At peak production, the Corpus Christi region “will account for 56% of total U.S. crude shipments abroad.”
Wood Mackenzie’s John Coleman, principal analyst for North America Crude Markets, said the “massive pipeline buildout” underway in the United States “will underpin and support production growth in the U.S. over the next decade.
“Part of this story will be the significant amount of capacity being built out of the Permian Basin, pointed at the Corpus Christi market. We expect this to quadruple Corpus Christi export volumes within five years.
“With the significant increase in demand for exports through Corpus Christi expected in coming years, the massive pipeline buildout into the market will need to be met with an equally massive export infrastructure buildout to facilitate an expected 300% increase in exports by 2023."
The Port of Corpus Christi is undergoing a $380 million expansion that could allow the Corpus Christi Ship Channel to accommodate very large crude carriers (VLCC). The U.S. Army Corps of Engineers earlier this year awarded the first dredging contract to deepen the channel to Great Lakes Dredge and Dock Co.
In March the port approved a 50-year lease agreement with Lone Star Ports LLC, a joint venture between The Carlyle Group and the Berry Group, for 200 acres on Harbor Island to develop a state-of-the-art petroleum export terminal. Trafigura Group Pte Ltd., among others, also is proposing to build a deepwater port in the area to load supertankers.
The Port of Corpus Christi today is the fourth largest in the United States in total tonnage.
“About half a dozen companies have proposed building new U.S. export facilities that are capable of fully loading a VLCC,” Wood Mackenzie researchers said. Three of the proposed terminals “will be needed, and two of those winning facilities will be in the Corpus Christi area.”