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Canadian Gibson Energy has struck a deal with Buckeye Partner to buy the South Texas Gateway oil terminal for some $1.1 billion in cash.
The deal will give Gibson access to “one of the most competitive liquids terminal and export facilities globally with direct pipeline connections to low-cost, long reserve-life resource supply, and very large crude carrier (“VLCC”) capabilities, the company said in a press release.
The South Texas Gateway terminal is the second-largest oil export facility in the United States with a storage capacity of 8.6 million barrels. There is also the option of boosting this to 10 million barrels.
The South Texas Gateway terminal was completed in 2020 to take advantage of the world’s growing thirst for U.S. crude. First exports left the port in July of that year. The facility has two deepwater docks capable of handling some 800,000 barrels of crude daily.
“To add 1 mmbbl/d of export capacity and nearly 9 million barrels of terminals storage in a highly strategic location furthers our momentum in growing Gibson’s infrastructure footprint and provides a platform for future growth with existing and new customers,” said the Canadian company’s president and CEO Steve Spaulding.
U.S. crude oil and fuel exports have been on a strong rise since last year when Russia’s invasion of Ukraine prompted the EU to look for alternative suppliers of hydrocarbons.
In March this year, combined crude and fuel exports from the United States hit a record of 11.27 million barrels daily, the Energy Information Administration reported recently. Of this, crude oil exports accounted for 4.8 million barrels daily, which was also a record high.
The March total represented a 12-fold increase in exports since the ban on selling crude oil abroad was lifted in 2015, the Wall Street Journal reported earlier this month.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com