Deeper Take on $360 Million Port of Corpus Christi Expansion: U.S. Army Joins Race To Expand U.S. Oil Exports
The news that the U.S. Army Corps of Engineers has placed a US$93-million order with Great Lakes Dredge & Dock Company for the deepening and widening of its ship channel at the Port of Corpus Christi (PortCC) broke last week in what was still a sluggish news environment. But it is significant news: this is the first step the federal U.S. government has made to support efforts to boost crude oil exports and it is also the first step in a competition dance between the Port of Corpus Christi and commodity major Trafigura.
Energy analyst David Blackmon noted the significance of the contract in a recent story for Forbes, adding it was part of a bigger port expansion project that would require US$360 million in funding. The port authority’s determination to see this project through despite the bulky price tag was made evident by its willingness to tap the debt market for the first time in its history and cough up US$130 million for the expansion. The rest would have to come from the federal government.
Why expand? Because U.S. crude oil exports are on the rise and will continue to be on the rise for some time, potentially reaching 4 to 5 million barrels daily. For context, this compares with last year’s all-time high of 2 million bpd, touched briefly in the first half of the year.
As exports rise it would make sense to cut loading costs by using larger tankers. However, there is only one port in the United States at the moment that can load Very large Crude Carriers, the monsters that can carry up to 2 million barrels of crude. This is the Louisiana offshore oil port and it mostly handles imports, hence the urgent need for more export terminals.
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