New York-based tanker broker Poten & Partners has detailed the sudden raft of landmark VLCC terminals potentially being built around the US Gulf, something that is likely to hit the aframax trade hard.
In its latest weekly report, Poten has reported on up to five VLCC terminals that could be built in the coming years stretching from Brownville in the southwest corner of Texas to LOOP in Louisiana.
Offshore Brownsville, Jupiter MLP, a privately held midstream company, has commenced the engineering, permitting and design of the Jupiter Offshore Loading Terminal (JOLT), a VLCC loading facility six miles offshore.
Oil trader Trafigura, meanwhile, has submitted plans to building an offshore crude oil terminal 15 miles outside of Corpus Christi, with a rumoured capacity of 400,000 barrels a day, enabling them to load one VLCC every five days using a single-point mooring buoy system.
Outside of Houston, Enterprise Product Partners is planning to develop another offshore oil export terminal with a loading rate of 85,000 barrels per hour, which is equivalent to one VLCC every day.
In Louisiana there are two projects – one old, one new – that have growing crude oil export potential. The old one is LOOP, the only current VLCC capable terminal. The other project is still in the planning stage. Midstream company Tallgrass Energy is proposing to build Seahorse, a new 700-mile, 800,000 barrels per day pipeline from Cushing in Oklahoma to St. Jamesin Louisiana. It is also planning a new terminal on the Louisiana Gulf Coast called Plaquemines Liquids Terminal (PLT). Tallgrass anticipates building an offshore pipeline extension that would give PLT the ability to load VLCCs.
“Even if not all these offshore terminals are built, VLCC export capacity from the US Gulf will likely grow dramatically in the next 3-4 years, coinciding with and facilitating a rapid expansion of US production,” Poten noted in its latest weekly report, adding: “There is a risk that the new export capacity will outpace production growth, but, given their pipeline connections and superior economics, it is likely that these new offshore terminals will be fully utilized. This will further increase the use of VLCCs in US exports, but may come at the expense of suezmaxes and in particular aframaxes, as it will reduce the demand for reverse lightering.”