Port Report: Growing U.S. crude oil exports means bigger ships to call on Gulf Coast

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Additional pipeline capacity from West Texas means filling bigger ships with crude oil; New Zealand steering away from carbon economy.

U.S. Gulf Coast marine terminals to expand

The U.S. is on track to become one of the largest crude exporters in the world, but the issue is how to get that crude oil to the world. As FreightWaves reported, tanker trucks are a bridge solution for ferrying crude oil from remote West Texas oil fields to the Gulf Coast for loading on tankers. But new pipeline capacity is the long-term solution for bringing crude oil to export docks, with three major pipelines planned for feeding the Port of Corpus Christi, the largest crude oil export gateway in the U.S. All told, about 2.5 million barrels per day of export capacity will be on pipelines.

The new pipeline capacity means the export terminals have to get bigger. Moda Midstream said last week it commissioned a new berth at its Corpus Christi location, allowing the largest tankers to load at an even faster rate. Many other crude oil export dock projects along with the necessary pipeline capacity are set to open in the next two years. Privately held trading firm Castleton Commodities is building a $1 billion pipeline to bring 440,000 barrels per day of crude oil to Corpus Christi. Castleton is also funding a $200 million crude oil terminal at the Port for loading tankers.

Energy logistics companies Buckeye Partners and Phillips 66 Partners are building the South Texas Gateway terminal, which will have two deep-water vessel docks for handling the largest oil tankers. The terminal is expected to be online by the end of this year. Crude oil to the terminal will come from the Gray Oak pipeline, which is also under construction. The BridgeTex pipeline is expected to come online this year as well, connecting West Texas oil fields to export projects in the Houston Ship Channel. Another pipeline called the Dakota Access, which will connect to crude oil supplies in the Bakken shale region, will service export markets out of the Port of Beaumont.

Many of the tanker will only be partially loaded at first as Corpus Christi’s harbor is only 45 feet deep, not the 54-feet depth required for fully loading tankers. But the Army Corps of Engineers is planning to dredge the ship channel to the required depth by 2021.

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New Zealand port aims for renewable fuel use

New Zealand is looking to mitigate the effects of climate change by moving to less carbon-intensive forms of energy, writes FreightWaves Jim Wilson. The country, which is dealing with some of its hottest temperatures ever recorded, is testing the use of hydrogen fuel vehicles at its main port. The aim is to reduce greenhouse emissions from the transport sector, which accounts for 18 percent of its carbon dioxide emissions. The project mirrors similar efforts in California where the state is helping to fund the use of hydrogen fuel cell technology at the busiest port in the U.S. In New Zealand, the government is providing about $5 million to fund hydrogen fuel cell projects. So far, five firms involved in refuse collection, food distribution and container logistics are looking at hydrogen fuel cells to reduce their carbon output.