Enterprise Products’ offshore crude oil terminal project in limbo

Enterprise Products Partners (EPP) LP’s 2-million b/d Sea Port Oil Terminal (SPOT) offshore crude export project lacks sufficient customer interest and may be cancelled. Enterprise received its US Maritime Administration license for SPOT last year and been targeting 2027 startup (OGJ Online, Apr. 10, 2024).

Speaking in a post-earnings conference call, chief executive officer Jim Teague said that “to date, we have not gotten enough traction in commercializing SPOT, though we continue to promote SPOT as we are the only company with a license to construct.” Noting a failure to reach specific terms, including volume commitments, with potential users of the terminal, Teague added “if we can’t achieve these within a reasonable amount of time, we will move on,” while declining to put a deadline on the project.

SPOT would be stationed about 30 nautical miles offshore Brazoria County, Tex., in 115 ft of water. A connection to EPP’s planned 4.8-million bbl Oyster Creek crude terminal, about 10 miles inland, would supply SPOT with crude at a maximum rate of 85,000 bbl/hr. Enterprise did not update the status of Oyster Creek in either its quarterly earnings or the subsequent call.

The offshore terminal’s limbo comes with global crude markets in a state of flux on both supply and demand sides. Teague acknowledged this in noting that in 2019, when EPP started SPOT’s application process, the assumption was that most of its exports would travel to Asia on very large crude carriers (VLCC). But market dynamics, including slower-than-expected overall demand growth and a shift in emphasis to exporting to Europe in the wake of Russia’s invasion of Ukraine, have instead shifted shipments towards smaller Aframax or Suezmax vessels.