Friday, January 8, 2016

First US crude export cargo leaves Texas


The first US crude oil shipment for 40 years has left Corpus Christi bound for Europe.
This follows the US Government’s lifting of the ban on crude exports on 18th December last year.
Ionia Management’s 2003-built Panamax ‘Theo T’ sailed on 31st December with a cargo of Eagle Ford Shale light crude.

The cargo was sold by ConocoPhillips to Vitol and the tanker was loaded at NuStar Logistics’ terminal at Corpus Christi, Texas. She was believed to be heading for Italy.

Enterprise Products Partners has also negotiated a cargo with Vitol for a shipment due to depart early this month.

The 600,000 barrel cargo of domestic light crude was due to load at the Enterprise Hydrocarbon Terminal (EHT) on the Houston Ship Channel during the first week of January, 2016.

NuStar CEO Brad Barron said the company was expanding its operations at Corpus Christi by building a second tanker jetty. The new jetty would bring a combined loading capacity to 90,000 barrels per hour.

The port authority is also planning to deepen the channel and build new infrastructure to handle larger tankers for crude and condensate exports.

US crude oil exports will change the oil and tanker market, according to Poten & Partners.

Most analysts agreed that the impact of the lifting of the ban on oil markets would be of limited importance, at least in the short-term, due to the world’s oil glut, while also, the currently narrow WTI-Brent spread renders US crudes uncompetitive in the export market, Poten said.

As for the export infrastructure, only US Gulf ports have the capability to load crude oil and most of these facilities only support Aframaxes but some, such as Corpus Christi, will be able to handle Suezmaxes in the future.

VLCCs may be used in the short term if the economics support transhipments in the US Gulf. Louisiana Offshore Oil Port (LOOP) is the only VLCC facility in the area. And is believed to be considering offering loading operations by 2018 and adding storage capacity, but reconfiguring LOOP will take time and money, Poten pointed out.

As a result, it was thought that the initial US crude oil exports will probably be undertaken on Aframax hulls.

Poten said; “Once exports start flowing, Aframax crude tankers will be the initial beneficiaries. If production continues to increase and pricing is favourable, Suezmaxes and VLCCs may come into the mix - which would open up Asian markets. The impact on product carriers will depend very much on the relative competitiveness of the US Gulf refiners.

“The lifting of the US crude oil export ban will probably be a net negative for the US Jones Act market. This market did receive a boost from the coastwise transportation of crude oil in the past, but these movements, which already declined significantly in 2015, may disappear altogether,” the broker said.

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