As West Texas drillers pump more crude in coming years, they’ll have to ship almost all of the increase in the Permian Basin’s output to buyers overseas – and most of those exports will pour out of Corpus Christi in South Texas, analysts say.
Energy research firm Wood Mackenzie believes U.S. oil producers will pump more than 11 million barrels of oil a day by 2023, lifting production by more than 4 million barrels a day over 2016 levels.
The firm forecasts that by 2023, Corpus Christi oil exports should more than double to 2 million barrels a day, significantly surpassing overseas shipments out of Houston.
“We see a big export surge ahead for Corpus Christi,” said John Coleman, senior analyst of North American crude oil markets at Wood Mackenzie in Houston. “There’s going to be a lot of investments to go alongside that.”
Oil companies are building two major pipelines from the Permian Basin to reach Corpus Christi, but virtually all of the crude headed to the South Texas city will be consumed overseas, not domestically.
U.S. refiners, outfitted to process heavy crudes from the Middle East, Canada and elsewhere, have become saturated with the kind of light, sweet crude that comes from U.S. shale plays.
Refinery demand for U.S. crude has dropped, Coleman said. For example, in the fourth quarter, when Houston midstream company Enterprise Products Partners increased the amount of crude flowing to Houston on its pipelines by 300,000 barrels a day, Houston crude exports rose by the same amount.
Analysts said U.S. oil producers will be able to [read more]