Oil and Gas Boom Fuels Port Corpus Christi’s Rise as Major Export Hub
Billions in infrastructure investments prepare the region for prominence in the global economy.
The oil and gas boom from the Eagle Ford Shale is so strong that the Coastal Bend region has turned from a petroleum-receiving hub to shipping natural resources domestically and around the world.
Back in 2011, crude oil moved into Port Corpus Christi for refining at three area refineries. By 2013, the Port was shipping out more crude than it was receiving to refineries across the country, along with other petroleum products to customers around the globe. In fact, growth in outbound shipping reached the 60-percent range in some months, according to the Port.
The port, the fifth largest in the U.S., by tonnage, is just one of the logistical and infrastructure advantages that make the Coastal Bend one of the most profitable shale-producing regions in the U.S. The Port lies only 70 miles south of the shale play, where an estimated 20 trillion cubic feet of natural gas and 3 billion barrels of oil lie under the ground.
The continued surge in production in the Eagle Ford Shale has a billion-dollar impact across South Texas as well as a ripple effect on growth for energy firms and their suppliers. Many outbound shipments are heading to other domestic destinations rather than overseas.
“The Port’s proximity to the shale play is one of the major reasons behind the growth in the Coastal Bend Region; compared to any other part of Texas, this is the best place to be,” says Dr. Jim Lee, Chair of the Department of Economics at Texas A&M University-Corpus Christi and Director of the South Texas Economic Development Center.
One of the largest investments in the region is the planned $11 billion liquefied natural gas (LNG) facility for Cheniere Energy, which is expected to export 13.5 million tons of LNG to non-free-trade agreement countries, pending approval from the U.S. Department of Energy. The company has signed an agreement with Endesa S.A. to supply 1.5 million tons of natural gas annually to the Spanish utility, and deals are in the works with utilities in Indonesia, Australia, Italy and Singapore.
Cheniere has also announced plans for a $500 million marine terminal and condensate facility in Ingleside, according to Jason French, Public Affairs director for Cheniere. The 552-acre condensate plant would provide 2.7 million barrels of storage for condensate pumped and trucked in from the Eagle Ford and Permian Basin Shale plays to ship out on vessels. Condensate is a light, low-density mixture of hydrocarbon liquids that typically is present in the production of natural gas.
Ongoing Investments
Other energy firms are planning major petroleum-related investments in the region. Occidental Chemical, in a joint venture with Mexichem, is constructing a $1.5 billion ethylene cracker facility at its existing Ingleside complex, which will produce chemicals used in PVC resin and materials used for PVC piping, according to a press release issued by OxyChem. The company also is planning an LPG export terminal at the former naval base at Ingleside, where the terminal will have the capacity to load four large vessels per month of propane.
A new partnership between Magellan Midstream Partners LP and Buckeye Texas Partners (formerly Trafigura AG) plans to build a $250 million facility that will process light, sweet crude for export and complete an 82-mile Rio Bravo pipeline capable of moving up to 100,000 barrels of crude and condensate daily.
Also at the Port, NuStar Energy is building new loading docks to pump in 65,000 barrels a day of Eagle Ford crude via a new pipeline. The private dock facility and refinery connections will enable NuStar to continue to expand its pipeline systems to meet the production growth taking place in South Texas, says President and CEO Curt Anastasio.
Refineries, including Valero and Flint Hills Resources, are also expanding to process more domestic crude. Valero plans to invest $350 million in expanding its Corpus Christi refinery to meet demand for gasoline, diesel and jet fuel. Flint Hills Resources’ West refinery is undergoing a $600 million expansion that will allow it to process more domestic crude oil while also reducing air emissions.