September 14, 2018 [Hellenic Shipping News] - The Louisiana Offshore Oil Port has quietly allocated one of its eight underground crude oil storage caverns to West Texas Intermediate, a reflection of the Texas grade’s continued ascent as the US’ flagship oil.
In documents published to its website, LOOP established this month a “Midland WTI cavern” into which the grade may be delivered. LOOP defines Midland WTI as maximum 44 API, maximum 0.45% sulfur, maximum 10 psi RVP, maximum 11 psi TVP and maximum 1% sediment and water.
The cavern is known as Segregation 21. It replaces Segregation 20, which allowed for deliveries of maximum 46.5 API Eagle Ford, Bakken and Midland WTI. That took effect in October 2017. The cavern has historically been used for light grades. Before October 2017, LOOP in the past also allowed for the Nigerian grades Bonny Light (34.4 API, 0.20%S), Forcados (30.3 API, 0.18%) and Qua Iboe (36.3 API, 0.12%) to be delivered.
The best option for delivering WTI into LOOP would be via Shell’s 375,000 b/d Zydeco pipeline (formerly known as Ho-Ho), which extends from Houston to the Louisiana terminal. Another option would be by barge or tanker from Corpus Christi or the Houston area delivering into LOOP’s offshore platform. A typical river barge holds 10,000-30,000 barrels of oil, while new articulated tug-barges (ATBs) used on the ocean can hold as much as 340,000 barrels. Shippers can also rail crude to Genesis Energy’s Raceland, Louisiana, terminal, where it can be injected into pipe and reach LOOP.
The move reflects the rising importance of WTI globally. The Permian region of West Texas and southeastern New Mexico, from which WTI comes, is currently producing around 3.4 million b/d of oil, according to US government figures. The Permian accounted for 26% of total US oil production in 2017. Phillips 66 is a large regional consumer of light sweet grades at its 249,700 b/d Alliance refinery in Belle Chasse, Louisiana.
LOOP’s eight caverns hold about 60 million barrels in total, or roughly 7.5 million barrels each. LOOP currently lists assignments for six of the eight caverns. This includes Mars in two caverns, Thunder Horse, LOOP Sour, and Segregation 17, into which Arab Medium, Basrah Light and Kuwait may be delivered. The status of two caverns is not known.
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