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Enterprise Secures SPOT Permit After Court Ruling

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Enterprise Products (EPD) has secured a deepwater port license for its Sea Port Oil Terminal (SPOT) after a favorable appellate court ruling, moving the crude oil export project closer to a final decision.

On April 4, the Fifth Circuit Court of Appeals upheld the federal review of SPOT over objections from environmental groups like the Sierra Club. The court found that the US Maritime Administration, the agency overseeing oil and gas infrastructure in federal waters, had adequately considered the environmental consequences in its review of the project.

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Proposed 30 miles offshore Freeport, TX, SPOT would help connect growing US crude oil production to global demand. East Daley Analytics’ Production Scenario Tools forecast US crude oil production to jump ~954 Mb/d over the next five years.

As pipelines from the Permian Basin to Corpus Christi near full utilization, more crude oil will be steered toward Houston-area refiners and export terminals, according to EDA’s Crude Hub Model. The figures and accompanying data, available to clients in Energy Data Studio, show the Crude Hub Model forecasts for oil flows to the Houston market by region and source (supply) vs refining use and movements from Houston (demand).

EPD plans to locate SPOT in water depths of 115 feet (see map), allowing the terminal to moor two Very Large Crude Carriers (VLCCs) with two single-point mooring buoys. Access for VLCCs would eliminate the need for reverse lightering and create economies of scale, lowering transport and handling costs. SPOT would be able to fully load one VLCC per day (85 Mb/h, 2 MMb/d).

Crude oil to SPOT would flow on twin 36-inch pipelines from Enterprise’s ECHO Terminal, located southeast of Houston (8.4 MMbbl of capacity), and the proposed Oyster Creek Terminal north of Freeport (planned capacity of 4.8MMbbl).

Under attack from environmental groups, EPD counters that SPOT would improve environmental performance amid the boom in US crude oil exports. By eliminating reverse lightering and leveraging the economies of scale of VLCCs, EPD claims SPOT would reduce emissions associated with oil transport, including a 95% reduction in vapor emissions and a 65% reduction in greenhouse gas emissions.

EDA currently does not include SPOT in the Crude Hub Model forecast, as Enterprise has yet to issue a final investment decision (FID). EPD said receiving the license will enable it to move forward to the next step in developing the project. If EPD gives the green light, East Daley expects SPOT would quickly ramp to full utilization given the expected growth in US crude oil production. – Gage Dwan Tickers: EPD.


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