The U.S. crude oil export market is undergoing a major transformation as a new offshore terminal project is expected to boost the capacity and efficiency of loading Very Large Crude Carriers (VLCCs). The Sea Port Oil Terminal (SPOT), developed by Enterprise Products Partners, is a deepwater facility that will be located about 30 nautical miles off the coast of Freeport, Texas. SPOT will have two single-point mooring buoys that can simultaneously moor two VLCCs and load one per day, providing an extraordinary level of cost- and time-efficiency. SPOT will also have robust pipeline connections from the Permian and other shale plays, where most of the incremental U.S. crude oil production will come from in the next five years.

SPOT is a game-changer for the U.S. crude oil export market because it will enable the export of almost all the additional light-sweet crude oil that will be produced in the U.S. by 2028. According to RBN Energy, U.S. crude oil production is likely to increase by 1.5 to 2 MMb/d over the next five years, reaching 14 MMb/d by 2028. Almost all those barrels will need to be exported, as U.S. refineries are already saturated with light-sweet crude oil. The most cost-effective way to export large volumes of oil to Europe and Asia is by using VLCCs, which can carry up to 2 MMbbl of crude oil. However, most of the existing U.S. export terminals along the Gulf Coast are not able to fully load VLCCs without reverse lightering, which involves transferring oil from smaller vessels to larger ones. This adds time and cost to the export process.

SPOT will solve this problem by allowing VLCCs to be fully loaded in one day, without reverse lightering. This will give SPOT a competitive advantage over other export terminals, especially in the Houston area, where crude oil pipelines from the Permian and other shale plays are diverting more oil. SPOT will have direct pipeline access to the ECHO Terminal and the Oyster Creek Terminal, which have a combined storage capacity of 13.2 MMbbl. These terminals will receive crude oil from the Permian and other shale plays through various pipelines, such as the Midland-to-ECHO pipeline system, the Shin Oak pipeline, and the Wink-to-Webster pipeline. SPOT will also have the flexibility to receive crude oil from other sources, such as the Cushing hub, the Eagle Ford shale, and the Gulf of Mexico.

SPOT is expected to receive a full license by September 2023, and to be completed by 2026. Once operational, SPOT will have the potential to handle virtually all the incremental exports that the U.S. will see over the next five years. SPOT will also enhance the security and reliability of U.S. crude oil exports, as it will be located in deepwater, away from the congestion and weather risks of the Gulf Coast ports. SPOT will be a key factor in shaping the future of the U.S. crude oil export market, as it will offer a fast, efficient, and cost-effective way to move large volumes of light-sweet crude oil to the global market.