Enterprise Products Partners has signed a long-term agreement with Chevron, supporting Enterprise's final investment decision to build an offshore crude oil export terminal on the Texas Gulf Coast.
Chevron, for its part, will benefit from an agreement with the developer of the new export terminal to ship its growing Permian production from the Texas fields to export markets.
Enterprise Products said last year that it plans to develop an offshore crude oil export terminal off the Texas Gulf Coast that would be able to fully load the biggest oil tankers in the world capable of carrying 2 million barrels of oil each.
This week, Enterprise Products announced the final investment decision for its planned Sea Port Oil Terminal (SPOT), consisting of onshore and offshore facilities, including a fixed platform located some 30 nautical miles off Brazoria County, Texas.
Enterprise's terminal is one of several proposed crude oil export ports in the U.S. Gulf Coast, including those of EPIC pipeline, a planned terminal in Corpus Christi by Carlyle Group, and the offshore Texas Gulf Terminals Project by commodity trader Trafigura.
"We are very pleased to announce these agreements with Chevron," A.J. "Jim" Teague, CEO of Enterprise's general partner, said. "As a result, we are announcing our final investment decision for our offshore crude oil terminal, subject to government approvals," Teague added.
"The SPOT facility provides opportunity to significantly expand our export capacity and access multiple market centers as we increase our crude oil produced out of the Permian," said George Wall, President of Chevron Supply and Trading, a division of Chevron U.S.A. Inc.
"As our production scales up, we will have the means to get those energy resources to the market," Wall said in a separate statement announcing the execution of long-term agreements for crude oil transportation, storage, and marine terminaling services between Enterprise and Chevron.
Chevron raised in March its targets for Permian oil and gas production as it is refocusing its investment priorities to have 70 percent of the 2019 spend delivering cash flow within two years. Chevron now sees its Permian unconventional net oil-equivalent production rising to 600,000 bpd by the end of 2020, and to 900,000 bpd by the end of 2023.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More