A group led by Phillips Petroleum Co. will begin the second phase of a feasibility study for a supertanker oil terminal off Texas.
Eighteen oil and oil related companies took part in the first phase of the study that began earlier this year. The study could lead to construction of a project designated Texport about 27 miles off Freeport in 110 ft of water.
The facility, which could cost $600 million to $1.3 billion, would be designed to handle 1-2 million b/d.
The country's only supertanker port at present is Louisiana Offshore Oil Port (LOOP).
WHAT'S UNDER STUDY
The second phase of the study will explore the possibility of seeking government approvals needed for construction, a market study dealing with things such as rate structure, and government and public relations aspects of the project.
The first phase focused on three key things in determining whether to build a deepwater port: technical feasibility of the project, economics of construction and operation, and federal and state regulatory factors.
Phillips expects a decision on whether to pursue licensing for Texport in 1991. It could take more than 5 years to complete construction, including time required to obtain permits and licenses.
The possible site off Freeport, relatively close to shore, would provide ready access to an existing pipeline system. The pipeline system interconnects with refineries that can process as much as 2 million b/d of oil.
Texport also would be located at its proposed site because the world's largest supertankers need as much as 110 ft of water depth to load and off load.
AN EYE ON IMPORTS
Phillips said a major factor interesting coventurers in the Texport study is that an oil port seems to be an effective method of handling imported oil in light of the growing number of vessels using U.S. ports.
It also said the increasing number of port calls raises questions about the ability of U.S. ports to handle vessel traffic in the future if imports rise as predicted.
For example, using the Energy Information Administration's 1989 Annual Outlook for Oil and Gas, an Interior Department study estimates that port calls by tankers will nearly double from 4,000 in 1988 to about 7,600 in 2000 if oil imports grow to about 12 million b/d. The present volume is more than 8.8 million b/d-6.532 million b/d of crude oil and 2.309 million b/d of products.
Phillips declined to disclose its partners in the study group because membership could change. However, it said, participants include major oil and petroleum related companies, U.S. and non-U.S.
WHY PHILLIPS?
Members of the Texport group asked Phillips to be lead coordinator because of the company's experience in similar offshore port studies.
Phillips, Seaway Pipeline Co., Dow Chemical U.S.A., and Continental Pipe Line Co. received a U.S. Department of Transportation license in September 1981 for construction of a project designated Texas Offshore Port about 12 miles off Freeport. The port, planned as a 500,000 b/d capacity project with a 56 in. pipeline to shore, fell victim to things such as high interest rates and declining oil imports.
Excluding volumes for the Strategic Petroleum Reserve, U.S. crude oil imports hovered at a little more than 3 million b/d in 1982-85 after falling from 4.144 million b/d in 1981. Imports slid because U.S. production began rising in response to high oil prices.
Oil imports began a steady climb in 1986 as domestic production slumped due to a price collapse brought on by flood of cheap oil on world markets.
LOOP OPERATIONS
LOOP, 18 miles off Louisiana in 155 ft of water, has an average throughput of 930,000 b/d this year, up from 840,000 b/d in 1989.
It was completed in 1978 at a cost of $830 million with a design capacity of 1.4 million b/d.
Owners are Marathon Pipe Line Co. 32.1%, Texaco Inc. 26.6%, Shell Oil Co. 19.5%, Ashland Oil Inc. 18.6%, and Murphy Oil Corp. 3.2%.
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