Trump Administration Approves Two Major Oil & Gas Export Projects
The Trump administration has signed off on permitting approvals for two major oil and gas export projects on the U.S. Gulf Coast: the Texas GulfLink offshore oil loading terminal, and the Commonwealth LNG plant in Louisiana. Both projects had been awaiting approval for years under the Biden administration.
Texas GulfLink (TGL) is one of several proposed deepwater oil loading terminals on the Gulf Coast, all designed to carry vast quantities of U.S. crude to buyers overseas, primarily in East Asia. America's Gulf Coast seaports are too shallow to accommodate fully laden VLCCs, so to load an export cargo in Texas, the world's biggest tankers have to take on several smaller parcels from smaller tankers via reverse lightering. This adds to the cost of VLCC export and reduces competitiveness on long-haul trades to Asia - though VLCCs aren't needed for transatlantic deliveries to Europe, the destination that currently dominates the Gulf export trade, according to competing firm Enterprise Products Partners.
If built, TGL would be located about 30 miles off the coast of Brazos County, Texas. Sponsor Sentinel Midstream says that it is the "only proposed offshore crude oil export terminal whose design complies with all current safe maneuvering guidelines for VLCCs at a [single point mooring]." Like Enterprise Products Partners' Sea Port Oil Terminal (SPOT), TGL would facilitate more oil sales to Asian buyers, supporting U.S. jobs in E&P.
"Today, we are unleashing the full power of American energy," said U.S. Transportation Secretary Sean P. Duffy in announcing the Maritime Administration's approval for the TGL project. "With this approval, we are increasing our energy revenue and unlocking our vast oil resources—not just for domestic security, but to dominate the global market."
The approval does not necessarily mean that TGL will be constructed immediately. The commercial picture for VLCC loading has changed, according to Enterprise Products Partners CEO Jim Teague; SPOT, which is pursuing the same client base, may be suspended soon if it cannot secure more customer interest in a cooling market for Texas-to-Asia oil shipping.
Last week, the Department of Energy approved a gas export license for the 9.5 mtpa Commonwealth LNG plant in Louisiana, the first project licensed under the new administration. The Biden White House had frozen approvals for new LNG plants pending a review of greenhouse gas impacts, but Trump revoked the freeze on his first day in office. Commonwealth has been waiting for its export license longer than any other project.
"Today's actions demonstrate that President Trump is prioritizing the American energy industry, and we are both pleased and grateful to have achieved these important regulatory objectives," said Commonwealth CEO Farhad Ahrabi in a statement.