Carlyle Group secured a 50-year lease on a land plot near Corpus Christi on the Texas coast in another step ahead on its US$1-billion oil export terminal project.
The plot, Reuters reports, spans 200 acres and will be the site of the terminal and docks that will help take the increasing amounts of U.S. crude to international markets.
The port authority of Corpus Christi meanwhile authorized the deepwater project, and dredging works that will make the future terminal accessible for larger tankers will begin this week.
The Carlyle project is one of eight planned for the U.S. Gulf Coast and the second at the Corpus Christi port. The private equity firm will invest US$400 million in the dredging works even though it has not yet made a final investment decision on the project.
The export terminal and storage space enthusiasm is certainly understandable. However, it seems that not all eight projects will see the light of day.
Reuters reported earlier this week shale oil and gas producers have started to reduce their capital spending plans under pressure for higher returns from investors. As a result, the flows of oil expected to the Gulf Coast might turn out to be lower than initially expected.
Some companies are already shelving projects or exiting them. Magellan Midstream Partners is one example: after on Monday the company announced a US$450 million downward revision to its capex outlook for the next two years, it said it will not proceed with a planned pipeline from the Permian to the Gulf Coast.
The pipeline would have added 1 million bpd of capacity to the existing network but, according to the company, by the time it begins operating in mid-2020 this additional capacity would not be needed as other pipelines will be completed earlier than that and producers will be producing less than previously estimated.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More