Firms want to build oil terminal off Texas coast

Three companies are planning to build an oil terminal 36 miles off the coast of Freeport, Texas, that would provide an alternative to offshore lightering of tankers.

Enterprise Products Partners L.P., TEPPCO Partners L.P., and Oiltanking Holding Americas Inc. said the Texas Offshore Port System (TOPS) would include an offshore port, two onshore storage facilities with about 5.1 million barrels of total crude oil storage capacity, and an associated 160-mile pipeline system.

The facility would have the capacity to deliver up to 1.8 million barrels per day of crude oil and could be expanded with construction of additional offshore facilities. Development would be supported by long-term contracts with Motiva Enterprises LLC and an affiliate of Exxon Mobil Corp., which together have committed a total volume of about 725,000 barrels per day.

The companies said demand for TOPS is being driven by planned and expected refinery expansions along the upper Texas Gulf Coast that are anticipated to add about 425,000 barrels per day of capacity beginning in 2010, as well as expected increases in general ship traffic at onshore ports.

Citing data from the federal Energy Information Administration, they say the Texas Gulf Coast is home to refineries with aggregate crude oil capacity of 3.9 million barrels per day when planned and announced expansions are included. Today they say 2.5 million barrels per day is imported on vessels that require lightering services.

Given the forecasted increased shipping traffic resulting from incoming crude oil supplies and operating limitations of ship channels, TOPS would offer refiners another delivery option that would provide added flexibility and enhanced reliability, the companies said in an announcement of their plans. TOPS is designed to allow operations 24 hours per day without restrictions on movements and vessel size that limit most ship channels.

They said the facility would be able to accommodate the largest vessels which can carry about 3 million barrels of crude oil.

An article in the Houston Chronicle noted that the terminal is similar to one proposed in 1972, but never built, called Seadock.

A similar terminal called the Louisiana Offshore Oil Port (LOOP) is located in the Gulf of Mexico, 18 miles south of Grand Isle, La., in 110 feet of water.

During the past 27 years LOOP has offloaded more than 8 billion barrels from more than 7,300 tankers. It handles about 12 percent of the nation's crude oil imports. LOOP is owned by Marathon Pipe Line LLC, Murphy Oil Corp., and Shell Oil Co.

Source: American Shipper