Enterprise, Chevron Agreements Support Offshore Crude Oil Port
Enterprise’s SPOT initiative includes onshore and offshore facilities, among them a fixed platform located about 30 nautical miles off the Brazoria County, Texas coast in approximately 115 feet of water. SPOT is designed to load very large crude carriers (VLCCs) at rates of about 85,000 bbl an hour, or up to approximately 2 MMbbld.
The SPOT design also meets or exceeds federal requirements and, Enterprise maintains, unlike existing and other proposed offshore terminals, is designed with a vapor control system to minimize emissions.
The long-term agreements with Chevron support Enterprise’s final investment decision. Construction is subject to obtaining required approvals and licenses from the federal Maritime Administration, which is currently reviewing the SPOT application.
“We are very pleased to announce these agreements with Chevron,” said A.J. (Jim) Teague, CEO of Enterprise’s general partner. “As a result, we are announcing our final investment decision for our offshore crude oil terminal subject to government approvals.” “The SPOT facility provides opportunity to significantly expand our export capacity and access multiple market centers as we increase our crude oil produced out of the Permian,” added George Wall, president of Chevron Supply and Trading, a division of Chevron USA Inc.
With the flexibility to allocate loading across multiple export facilities, Enterprise will optimize its Houston Ship Channel facilities by creating additional capacity to load growing LPG, ethane, and petrochemical export volumes. The company observed that as domestic crude oil and NGL production continues to exceed U.S. demand, and marine terminals approach full utilization, projects like SPOT and the expansion of Enterprise’s LPG, ethane, and petro-chemical capabilities will be essential to balancing the market and meeting global demand for U.S. production.
Simultaneous with the SPOT agreements, Enterprise and Chevron have signed agreements for crude oil transportation, storage, and marine terminal services. The deals, together with other customer agreements, support expansion of Enterprise Products’ crude oil system from the Permian Basin to the company’s ECHO terminal in Houston.
The agreements also provide for storage at the ECHO terminal, which has a total capacity of 8.3 MMbbl and connects to all refineries in Houston, Pasadena, Texas City, and Beaumont/Port Arthur, Texas. ECHO is among three integrated delivery points for the NYMEX HCL crude oil futures contract.
“These agreements support our Permian off- take strategy by providing greater takeaway capacity for our increasing Permian production,” said Wall. “As our production scales up, we have the means to get those energy resources to the market.” “We are pleased to provide one of the premier Permian producers with transportation, terminaling, and storage services,” added Teague.
(SOURCE: The Weekly Propane Newsletter, September 9, 2019)
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