- U.S. crude oil exports have maintained high levels despite reductions in domestic supply and international demand for crude.
- Kpler points out that ‘2020 US shale grades departures increased 11.9% compared to a year ago in spite of decreased global demand.’
- Barring unforeseen government interference in the production and flow of oil out of the Permian Basin, it is expected U.S. exports of shale-grade crudes to continue to rise.
Following expansions completed at Port CC
In just the past few months, we have seen the following expansions announced or completed at Port CC:
- Port CC announced the final leasing and pipeline easement agreements for the planned Bluewater Texas project, a deepwater, crude oil export terminal, in which Trafigura has formed a 50/50 joint venture with Phillips 66 PSX -3%.
- This offshore loading facility will be able to fully load VLCC-class crude oil tankers, the largest class of tankers currently in operation.
- At the end of December, Buckeye Partners announced crude oil export operations have commenced at the second deepwater dock at its South Texas Gateway facility, a terminal constructed at the mouth of the Corpus Christi Ship Channel in Ingleside, Texas.
- Buckeye’s facility can fully load Suez Max tankers, and load VLCC’s to about half their full capacity.
- And, where LNG exports are concerned, Cheniere Energy loaded its first cargo from the third liquefaction train of its Corpus Christi LNG plant in September.
Port CC facility operators have also significantly expanded their storage operations over the past two years, and Port CC now ranks as the nation’s second-largest crude oil storage hub, behind Cushing, Oklahoma.
Fall in the U.S. Gas
U.S. shale has staged a nice recovery in recent months, but could soon be facing constraints due to looming shortages of frac sand.
That’s the judgment of Kpler, an international commodities intelligence firm, in a new report released this week.
Kpler points out that “Many sand miners collapsed or were underinvested because of low prices,” and concludes that reality, combined with the recent rapid rise in the U.S. domestic rig count will result in “unavoidable” supply chain disruptions that will limit the potential for further supply recovery in the shale sector.
20% fall in the U.S. shale in 2020
Production of oil from U.S. shale formations fell by 20% during 2020, ending the year at about 7.44 million barrels of oil per day.
Kpler’s belief is that shortages of frac sand and other technical constraints will prevent a full recovery to previous production levels over the next 18 months, even with an oil price of $70 per barrel.
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Source: Forbes
