SUGARLAND, TX–(Marketwired – Aug 24, 2015) – Researched by Industrial Info Resources (Sugar Land, Texas) — Crude oil storage is playing an increasingly large role in today’s economic landscape. Crude oil production in the U.S., although slowly declining, remains well above year-ago production levels. In addition, crude oil imports have remained relatively steady recently, averaging well over 7 million barrels per day (BBL/d) since the final week of June and topping 8 million BBL/d for the week ending August 14. Add to this the looming refinery maintenance season in the fall, decreasing gasoline consumption as the summer driving season ends, and a contango market in which traders seek a profit by storing oil for several months, and the need for storage facilities becomes obvious.
The most active area in the U.S. for the construction of petroleum storage terminals is along the U.S. Gulf Coast. Industrial Info Resources is tracking more than $3 billion in active crude oil and petroleum products terminals (SIC codes 5171 and 5172) that are being constructed in this region. The highest concentration of spending is occurring in Texas, particularly in the Greater Houston and Corpus Christi zones.
Down the road in Corpus Christi, Cheniere Energy Incorporated (NYSE:LNG) (Houston) plans kick off construction of a 2 million-barrel storage terminal with 1 million-BBL/d throughput to export condensate. When officially announcing the project in late June, Nelson Lee, director of crude trading and origination at Cheniere, made it clear that the facility would be able to export any type of domestic crude oil, should the nation’s export ban on crude oil be lifted.
While these are some of the larger projects, billions of dollars of other terminals-related projects are also on the books in the Gulf Coast region, including $48 million of tank inspection and upgrade projects. As U.S. crude oil production diminishes much more slowly than initially anticipated, storage facilities will play an ever-more important role as the nation’s production and trade patterns continue to evolve.
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