A week after forming join ventures to build pipelines linking shale fields in West Texas and North Dakota to the Cushing, Oklahoma oil hub and the US Gulf Coast, Phillips 66 is proposing a deepwater crude export terminal off the Gulf Coast.
The company, with major operations in Bartlesville made the announcement this week that it has applied for federal and state permits to build the port about 20 miles off Corpus Christi, Texas.
The project is being developed with the Port of Corpus Christi and would compete with nearby shale export terminals proposed by investor Carlyle Group and commodities trader Trafigura AG.
The Phillips 66 project would be the ninth such export operation for the Gulf Coast.
Phillips 66’s proposed project “would provide an additional safe and environmentally sustainable solution for the export of abundant domestic crude oil supplies from major shale basins to global markets,” spokesman Dennis Nuss told Reuters.
The offshore port would provide an outlet for oil coming from recently proposed Liberty and Red Oak pipeline joint ventures that start in early 2021. Phillips will operate the $1.6 billion Liberty pipeline which will carry oil from the Rockies and North Dakota to Cushing, Oklahoma and help finance the $2.5 billion Red Oak pipeline.
Phillips 66 aims to reinvest 60 percent of its annual cash flow into its business, Chief Executive Greg Garland said during a presentation at a JPMorgan Chase & Co energy conference in New York. He did not mention the project at the conference.
“We’ll do $1.5 billion to $2.5 billion of growth investments” and spend a similar amount of cash flow on share buybacks each year, Garland said.
Bluewater Texas Terminal has proposed to run two 30-inch oil pipelines to buoys off San Jose Island in San Patricio County, according to a May 2019 document outlining the project.
The facility could load up to 1.56 million bpd, nearly the capacity of a supertanker. If approved by the U.S. Maritime Administration, U.S. Coast Guard and Texas regulators, operations could begin in mid-2021, said a person familiar with its plans.
