Nov. 8 (Bloomberg) -- The Louisiana Offshore Oil Port, the U.S.’s largest point of entry for foreign crude, is receiving an increasing amount of domestic oil shipped by tanker and is taking steps to accept more in the future.
The port began accepting cargoes in August after making modifications to one of its three offshore buoys to allow hook-ups to smaller domestic vessels, said Jeff Singer, a business development representative for LOOP LLC. Most of the shipments, which are about 330,000 barrels each, are Eagle Ford oil coming from Corpus Christi, Texas.
Shipments have risen as more crude produced inland reaches the Gulf Coast and is bought by refiners as a less-expensive alternative to oil imported or produced in the Gulf of Mexico. Plains Marketing’s posted price for Eagle Ford crude in south Texas was $95.75 a barrel yesterday, compared with $105.44 a barrel for Light Louisiana Sweet, a similar oil.
“It’s pretty variable today, sometimes we see two to three shipments a week, sometimes there are a few weeks between shipments,” Singer said yesterday during a tour of the company’s Clovelly, Louisiana, import hub. “So it’s not totally a steady stream, but it’s increasing, and it really has been since we got it online in August.”
Flint Hills Resources LLC, a subsidiary of Koch Industries Inc., opened an export terminal earlier this year near its Corpus Christi refining complex to ship excess Eagle Ford oil it receives but can’t process.
Output from the Eagle Ford shale formation may increase to 468,000 barrels a day by the end of the year, analysts at Simmons and Co. wrote in a July 19 report. The field produced no oil as of April 2008, according to data from the Texas Railroad Commission. Oil production in Texas rose to 2 million barrels a day in August, the highest level since June 1988, Energy Department data show.
LOOP has also received waterborne shipments from St. James, Louisiana, which can receive rail shipments of Bakken oil from North Dakota. St. James terminals don’t have pipeline access to some Louisiana refineries that the LOOP system does, Singer said. LOOP plans to make modifications at its other two offshore buoys so they can also accept domestic cargoes, he said.
The port has eight underground caverns that can store about 58 million barrels of oil and 15 above-ground storage tanks with about 9 million barrels of capacity. LOOP received 901,599 barrels a day of imports in August, according to the Louisiana Department of Natural Resources.
LOOP has direct access to Louisiana refineries and the 1.2 million-barrel-a-day Capline pipeline that moves oil from St. James to Patoka, Illinois. In addition to foreign and domestic cargoes, the port also takes streams of Mars and Thunder Horse crudes from the Gulf of Mexico.
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