The first oil shipment in forty years has departed the Port of Corpus Christi, bound for Europe with a load of light crude from the Eagle Ford Shale.
Congress lifted the ban on oil exports during recent budget negotiations. The deregulation of shipments was a high priority for upstream oil producers and some members of Congress in oil-intensive districts, but was opposed by American refiners, which have historically benefitted from inexpensive domestic crude stocks.
The Bahamas-flagged tanker Theo T sailed on the last day of 2015, carrying crude sold by ConocoPhillips in a deal with Swiss traders Vitol. The firm used the NuStar Logistics terminal in Corpus Christi, and a series of pipeline changes (including the reactivation of a dormant line) allowed the oil to be transferred.
Vitol did not comment on the destination of the shipment, but the Theo's AIS data show her headed for an unspecified port in Italy.
Firm Enterprise Products Partners is also in a deal with Vitol for a shipment departing the NuStar terminal scheduled for sometime in early January. Nustar CEO Brad Barron says his firm is expanding its operations at Corpus Christi, and that they are building a second private dock to accommodate more tankers. The new dock would bring combined loading capacity to 90,000 barrels per hour.
The port authority is planning new investments as well. “Infrastructure improvements at Port of Corpus Christi have placed our port in a unique position as a critical component in the export of U.S. crude and condensate,” port director John LaRue said in a statement. “Future capital improvements including deepening the ship channel will accommodate larger vessels . . . [to] supply US crude oil to global markets.”
Texas Eagle Ford Shale crude is low in sulfur and may fetch a premium on the international markets. The region's industry association says that the play has the largest financial investment in an oil and gas formation in the world, and while it was once an extremely active area, falling oil prices have cut deeply into development. Upstream companies in Texas will be watching the success of exporters closely to see whether drilling might become profitable once more.