Port of Corpus Christi to become top U.S. crude oil export hub
The Port of Corpus Christi is poised to eclipse the Port of Houston as the top U.S. crude oil export hub over the next 10 years, according to a new report from the global energy research firm Wood Mackenzie.
Wood Mackenzie’s North America Crude Markets Service believes that major investments in shipping facilities and pipeline projects will route more than 2 million barrels of Permian Basin crude oil per day to the South Texas waterway within the next eight to 12 months.
As a result, export volumes at the Port of Corpus Christi are expected to quadruple over the next five years.
“With the significant increase in demand for exports through Corpus Christi expected in coming years, the massive pipeline build out into the market will need to be met with an equally massive export infrastructure buildout to facilitate an expected 300 percent increase in exports by 2023,” Wood Mackenzie North America Crude Markets Principal Analyst John Coleman said.
Crude oil production volumes are expected to rise across the Lower 48 by 4 million barrels per day over the next five years — with a significant portion coming from the Permian Basin of West Texas and southeastern New Mexico and headed to Corpus Christi.
To facilitate those incoming volumes, the Port of Corpus Christi is undertaking a $380 million project to deepen and widen the Corpus Christi Ship Channel to accommodate the world’s largest crude supertankers.
Once complete, the channel will be able to allow traffic of fully-loaded Suezmax tankers capable of moving 1 million barrels of crude oil in a single shipment. Very Large Crude Carriers, or VLCCs, capable of carrying 2 million barrels of crude oil can already be partially filled at the port and then fully loaded in deeper waters of the Gulf of Mexico.
But Wood Mackenzie’s report identifies about half a dozen companies that have proposed building new export facilities in various locations that will be capable of fully loading a VLCC. The firm’s research suggests that only three of the proposed terminals will be needed and that two of those winning facilities will be located in the Corpus Christi area.
Shipping out nearly $6.48 billion of crude oil through April, the Port of Houston is the top U.S. crude oil export hub, followed by the Port of Beaumont with $3.59 billion and the Port of Corpus Christi with $3.51 billion, data from Miami trade research firm WorldCity shows.
Wood Mackenzie forecasts that at peak production, the Corpus Christi region will account for 56 percent of total U.S. crude shipments abroad.
Port of Corpus Christi CEO Sean Strawbridge noted the report came out at a time when oil giant Phillips 66 announced two separate joint ventures with Bridger Pipeline and Plains All American Pipeline to move even more crude oil to the South Texas waterway.
“We share the view from Wood Mackenzie that Corpus Christi is evolving into the preferred outlet for US crude exports,” Stawbridge said. “Therefore developing the needed infrastructure such as increased pipeline capacity, storage facilities, marine terminals, and a deepening and widening of the Corpus Christi Ship Channel are the primary focus of our efforts and capital.”