Offshore Mega-Terminals Are Coming Because Oil Supertankers Are Too Big for Our Ports

Massive tankers and excess oil mean a new infrastructure, but not everyone is excited about the ambitious plans.

Oil Tanker
Getty Imagesjoeygil

The next big thing in oil is happening offshore, but it has nothing to do with drilling. The United States wants to build offshore shipping terminals big enough to handle the size and volume of a new generation of megatankers.

Call it a sign of the times. The United States is becoming a major oil exporter, and it needs new infrastructure to keep the crude flowing. While much of the focus has been on controversial pipeline projects, getting the oil to our ports is only half the problem.

The Supertanker Problem

A new generation of “very large crude carriers” with capacities of up to 2 million barrels of oil have become the preferred way to move crude around the world. Those big ships offer big profits and efficiencies, so much so that ports have been dredging channels and deepening docks to accommodate their girth. Still, most U.S. ports are too shallow to accommodate fully loaded VLCCs, which has led to the awkward spectacle of filling the vessels part-way and topping them off via another ship at sea. If that sounds like an expensive way to risk spilling oil, it is.

That's why the offshore export facility will become the latest addition to the Gulf Coast. The oil is stored on shore and then pumped 15 miles offshore, where the deep water allows large ships to fill up. The part of the filling station that floats on the surface usually has a rotating connector that allows ships to be stable with a single point from any direction.

UK, English Channel, pipes on deck of oil tanker, view from bridge
Getty ImagesKos Picture Source

In late August, Enterprise Products Partners said it plans to build an massive offshore oil exporting terminal south of Galveston. “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,” company CEO A.J Teague.

Then this week a commodities firm called the Trafigura Group joined the fray. The global trading firm announced plans to build its Texas Gulf Terminals Project 12.7 miles off the coast of North Padre Island, near Corpus Christi. A company spokesperson said Trafigura will fund the project, adding that “It’ll be a significant investment. Timing is TBD, as we have just begun the permitting process.”

The company says its deepwater terminal will feature flow rates of up to 60,000 barrels per hour and the capacity to load 8 VLCCs per month. Each super-ship would take 48 hours to approach the terminal, moor, transfer cargo, and leave.

The Oil Boom Goes Offshore

Offshore terminals have their opponents, however, and we're not just talking about environmentalists afraid of another spill at sea. The Port of Corpus Christi has a lot to lose if crude exports bypass its facilities. The entity has filed objections to Trafigura's permit, claiming the company’s application is incomplete and bringing up Trafigura's 2001 federal conviction for violating U.N. sanctions related to the “oil for food” program in Iraq.

Energy companies with footprints onshore are also unhappy about the competition. Take Flint Hills Resources (a subsidiary of Koch Industries), which has grand plans to expand a crude export facility near Corpus Christi and stated that VLCCs could be accommodated.

Oil Tanker
Getty Imagesjoeygil

Nevertheless, offshore terminals are a signal that the U.S. crude export market is booming, and that industry is planning for the boom times to continue. The United States is now producing almost 11 million barrels of oil a day and selling it abroad. Right now, the only offshore terminal operating in the Gulf is off the coast of Louisiana. The Louisiana Offshore Oil Port (yes, LOOP) is nearly 40 years old and was created to take oil into the United States, not the other way around. Now engineers are looking to convert LOOP into an export terminal.

These are the woes of an energy exporting economy. Infrastructure projects like offshore export terminals are solid signs that this status is not expected to change anytime soon.

Advertisement - Continue Reading Below
More From Energy
www.militarycenter.com.ua

www.monaliza.kiev.ua/brands/silviamo-9-18let

monaliza.kiev.ua