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Large Crude Build Forces Oil Prices Lower

Large Crude Build Forces Oil Prices Lower

Oil prices slipped on Wednesday…

Houston Firm Plans Huge Oil Export Terminal Offshore Texas

Storage tanks

To capitalize on the growing U.S. exports to Asia and Europe, Houston-based Enterprise Products Partners 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.

Currently, the Louisiana Offshore Oil Port (LOOP) is the only oil port in the United States capable of fully loading the so-called Very Large Crude Carriers (VLCC).

While U.S. production is growing and Permian production is booming, there isn’t a port along the Texas Gulf Coast that is able to load 2 million barrels of oil in one tanker because of the shallow waters close to the coast. So Enterprise Products Partners is planning to put its oil terminal offshore, some 80 miles off the coast to accommodate the huge VLCCs and thus “provide the most efficient and cost-effective solution to export crude oil to the largest international markets in Asia and Europe,” the company said in a statement.

Enterprise Products has already started front-end engineering and design (FEED) and is preparing applications for regulatory permitting. The initial design involves some 80 miles of pipeline to the offshore terminal capable of loading and exporting crude oil at approximately 85,000 barrels per hour.

Energy analysts have estimated that Enterprise’s project could cost between US$1 billion and US$2 billion, Houston Chronicle reports.

Related: Who Actually Benefits From Sanctions On Iran?

“Capital and infrastructure to support our project would be solely provided by private capital and would not be reliant nor contingent upon state or federal government agency financial support or infrastructure development. We believe this would enable us to deliver this project in a timely manner once permits are granted and the project is underwritten,” A.J. “Jim” Teague, chief executive officer of Enterprise’s general partner, said in a statement.

“Given the long-term outlook for growing supplies of U.S. crude oil production, increasing global demand requiring super tankers, and the future limitations of Gulf Coast port and lightering capacities, we are confident this project will be embraced and supported by both domestic and international customers,” Teague said.

A final investment decision on the offshore oil terminal will be subject to receiving the requisite state and federal permits and customer demand, Enterprise Products said.

By Tsvetana Paraskova for Oilprice.com

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