Louisiana Offshore Oil Port anticipating ‘tsunami of crude’


The Louisiana Offshore Oil Port is anticipating a growing flood of crude headed its way, driven by the U.S. shale revolution and a glut of Canadian supply, Argus Media reports.

Speaking at the recent Argus Americas Crude Summit in Houston, LOOP President Terry Coleman suggested more exports will be necessary to soak up the supply, creating a “tsunami of crude coming into the area.”

The Louisiana Offshore Oil Port is currently the only U.S. facility capable of fully loading very large crude carriers with a capacity of 2 million barrels. The facility can export about 1 million barrels per day using existing infrastructure.

For years, St. James Parish, Argus reports, was perhaps best-known as the delivery point of the Louisiana Light Sweet contract. There, domestic supply (mostly from the Mars and other offshore fields) was blended with imported barrels to LLS specifications before being shipped northward on the 1.2 million barrels per day Capline pipeline.

The shale revolution—and bottlenecked Canadian heavy crude supply—has reversed that practice, shifting U.S. crude flows south to tidewater and export markets, with inbound supply from pipelines like Shell’s Zydeco and Energy Transfer’s Bayou Bridge lines.

That directional shift in crude flow has placed a greater emphasis on crude quality and segregation, midstream executives noted at the summit. And at LOOP, new inbound pipeline capacity has shifted its focus to “protecting the quality of that barrel” and exporting it, Plains executive vice president Chris Chandler noted. To maintain quality, crude moving by pipelines needs to be batched in flows of 100,000 to 150,000 bl.

Argus Media has the full story. Read a 10/12 Industry Report story about Capline and LOOP exports.