Based on its easily accessible location, coupled with the advantages made possible by the Port of Corpus Christi, the Coastal Bend region is currently anticipating a number of export opportunities in crude. In addition to existing pipeline opportunities into the Eagle Ford and Permian Basin, two more new projects are on the books.
"One of them is the 440,000-barrels-aday EPIC pipeline," said CITGO Strategic Planning Manager Adrian Davidson. "Another is the 400,000-barrels-a-day South Texas Gateway pipeline. This will bring in more crude from the Permian Basin to Corpus Christi and be available to local refiners and will also be exported."
Addressing attendees of the Association of Chemical Industry of Texas (ACIT) South Texas Economic Outlook Luncheon held recently in Corpus Christi, Texas, Davidson said another export opportunity has arisen due to Mexico opening its market for transportation fuels.
Mexico primarily receives its imports on the coast. "The problem is," Davidson said, "they do not have a really good infrastructure, so their interior areas are not getting well-supplied. That is where Corpus Christi can be a really good source."
Corpus Christi has refiners that produce transportation fuels, Davidson noted, and can also import gasoline and diesel into Corpus "and then move it down the coast into Mexico."
Howard Energy also has announced plans to construct a products terminal in Corpus Christi to rail initially into northern Mexico, ultimately building a pipeline servicing Monterrey, Davidson added.
Thanks to continued production and "an excess of crude" stemming from the Eagle Ford and Permian Basin, Davidson said the bulk of exports will comprise light, sweet crude going to Europe and Asia.
"Though, interestingly, one-third of exports are going to Canada," he said. "That is crude from the Gulf that's going to Canadian refiners on their east coast, which are not able to handle the heavy western Asian crudes."
Local key focus areas
Representing the refining sector, Davidson zeroed in on three specific areas of interest that demand the attention of that industry: reliable water supply, community engagement and industry competitiveness.
"We live in a region that, on a periodic basis, will go through droughts, so all of us have interest in having a long-term, diversifiable water supply," he said.
Davidson noted that over the decades there's been a collaborative effort to make sure there's sufficient water "for everything and for everyone, as well as enough to support growth."
The Port of Corpus Christi led the first phase of the Mary Rhodes pipeline to bring in water from Colorado to Corpus Christi, and the City of Corpus Christi took responsibility for finishing the second phase of that effort.
"Over the last couple of years, there have been discussions among stakeholders in terms of exploring different, alternative sources of water, including looking at desalination technology," Davidson added.
Community engagement, Davidson explained, is the balancing act of promoting growth in the area by providing new, additional jobs while still maintaining the quality of life of the people who populate the area.
"I think the take-away for all of us is that it is really helpful to support projects that are well-designed and projects that really make a positive impact on the community," he said.
Regarding industry competitiveness, Davidson noted area refiners have some advantages with regard to crude supply and natural gas. "However, we are tied to and have to compete with the world market, s o any poorly crafted regulation or public initiative could have harmful effects," he concluded.
For ongoing industry updates, visit BICMagazine.com.
