Corpus Christi: Biggest Boom Since WWII? -- December 30, 2019

Locator: 10010CORPUS.

Is Corpus Christi undergoing a boom like never seen since WWII? I don't know but it certainly seems that Corpus Christi has been in the news a lot this year. I noticed that when I was going through the top stories for the year. Then, today, RBN Energy has another update on the city. Re-posting (and archived):

RBN Energy: Plains All American's Cactus II ramps up Corpus deliveries.

t’s safe to say that Permian producers had a good Christmas. Sure, their stock prices may be off a bit and their rig counts are down. But the absolute prices they are paid for their crude oil are up by almost $20/bbl versus this time in December 2018, and the price spreads between the Permian and neighboring markets have significantly narrowed as a result.

What’s driving this change? There are a variety of factors at play, but chief among them is the new pipeline infrastructure that has helped lift Permian producers’ oil price realizations. Today, we check in on the status of one of the major new pipelines that have contributed to the seismic shift in the Permian oil market this year.

From August 13, 2019:

RBN Energy: Plains All American Cactus II oil pipeline nears commercial operation. [We posted a screenshot from twitter regarding this yesterday.) This will be a big story over time. Archived.

It’s no secret by now that Permian oil markets have struggled over the last two years as nagging takeaway-pipeline constraints put a damper on production growth and, at times, hammered pricing in the basin. Like the Houston Astros’ opponents in the AL West, though, the days are numbered now for Permian oil market constraints, as two new large-diameter pipelines from West Texas to Corpus Christi will be in-service by the end of the month. One of those pipes, Plains All American’s Cactus II, is set to enter service this week.

Cactus II consists of 575 miles of new 26-inch-diameter pipeline and extends from McCamey, TX, in the southern Midland Basin to delivery points near Corpus Christi. Note that Cactus II can also access the oil hub at Wink, TX, in the Delaware Basin via a capacity lease on another Plains-operated pipeline. Also, while Cactus II closely follows the route of Plains’ original Cactus Pipeline , the two pipelines do not share facilities. From the Permian, Cactus II extends southeast toward the Texas Gulf Coast and has been completed to Ingleside, TX, which is just across the bay from Corpus Christi. Plains confirmed last week that Cactus II is in the process of taking linefill in preparation for entering commercial service this week. Plains is also working to complete a final segment of Cactus II that will run from Taft, TX, to delivery points across the water from Ingleside along the Corpus Christi Ship Channel. This segment is expected to be completed by the end of the first quarter of 2020.

From August 20, 2019, Platt's:

From S&P Global:

The first US crude cargo originating from the new Cactus II pipeline loaded onto the Aframax Paramount Hatteras out of the Buckeye Terminal in Corpus Christi, Texas.

The Paramount Hatteras is currently stationary near GOLA after arriving there Monday. It's likely the ship is headed to the terminal to conduct a reverse lightering job for a VLCC set to export.

CFlow shows the Paramount Hatteras anchored next to the Irini N Lemos, a currently unladen VLCC. SK Energy booked the Irini N Lemos for a US Gulf Coast-South Korea run at lump sum $4.975 million, loading August 17-21, according to Platts fixture logs.

".... soon be the first in the Port of Corpus Christi to export these barrels transported to South Texas via one of three large Permian long-haul pipeline projects," ...

On August 12, Trafigura announced in a press release that the 670,000 b/d Cactus II pipeline began service to Ingleside, Texas. Cactus II service to Corpus Christi is expected to start in the first quarter of 2020.

Cactus II will be joined by the 400,000 b/d EPIC crude pipeline and the 900,000 b/d Gray Oak pipeline, both expected to start up by year's end.

From September 10, 2019:

RBN Energy: Corpus Christi crude oil exports surge to a record.

Despite last month’s much-publicized start-up of two new crude oil pipelines from the Permian Basin to the Gulf Coast — Plains All American’s Cactus II and EPIC Crude Holding’s EPIC Pipeline — tangible evidence of how much crude is actually moving on those pipelines has been hard to come by. That’s because crude oil pipelines don’t post daily flow data, like some natural gas pipelines do, and shipper volumes are a closely held secret that often only becomes available long after the fact.

However, Cactus II and EPIC both deliver into the Corpus Christi, TX, market area, where a number of export facilities have been waiting to move Permian barrels out into the global market. We’ve been keeping a close eye on Corpus-area docks and have noticed a significant increase in export volumes over the last few days — a clear indication that Permian crude on Cactus II and EPIC has broken through to the global market. Today, we detail a recent rise in Corpus Christi oil export volumes driven by new supply from the Permian Basin.