Phillips 66, Trafigura to partner on VLCC project offshore of Port of Corpus Christi

Permitting is underway for a new offshore development that — if realized — could significantly increase oil exports out of South Texas, according to officials.

In a news release issued early Friday morning, Phillips 66 and Trafigura made public a joint venture proposal to construct as many as two single-point mooring buoys about 20 miles east of the mouth of the Port of Corpus Christi.

The facilities as contemplated would make possible loading to max capacity very large crude carriers — tankers that can move as much as 2 million barrels of crude oil per vessel. Ships don’t currently have similar access — the Corpus Christi ship channel is too shallow for load and passage.

Sean Strawbridge, Port of Corpus Christi Authority CEO, estimated the development could bring in as much as $50 million per year in combined tax revenues and port revenues.

Oil and gas operators have said having infrastructure accommodating VLCCs will make Corpus Christi’s trade corridor more competitive.

The project is anticipated to represent a 50-50 endeavor — with Phillips 66 responsible for construction — under the name Bluewater Texas Terminal LLC, according to news releases issued by the two companies.

Trafigura, which had been pursuing a similar terminal about 13 miles offshore of Padre Island National Seashore, has dropped its permitting application for that project, it states.

Port officials, in a separate news release, wrote that the port plans to lease property and rights-of-way for the project, and intends to work closely with Bluewater Texas “to support this environmentally sustainable infrastructure for the export of crude oil to global markets while benefiting the regional economy.”

“We salute Phillips 66 and Trafigura for agreeing to partner in a single point mooring export facility, and for recognizing the port as an integral part of the success of this ambitious yet much-needed capability,” Strawbridge wrote in the email.

Shortly after the news was announced, John Donovan of the Port Aransas Conservancy praised the single point mooring plans, which he described as safe and effective.

“PAC applauds Phillips 66 and Trafigura for going offshore — something we have long proposed,” he said. “We certainly support that approach in contrast to what the (Port of Corpus Christi) has in mind for Harbor Island.”

The port authority has supported proposals to develop a marine terminal on the island, as well as a desalination plant.

The conservancy has vehemently protested those proposals, contending that there isn’t a way to mitigate potential threats to the ecologically sensitive area or Port Aransas’ economy, given the project scopes.

Port officials have asserted the Harbor Island projects could be designed and operated in a way that would adequately mitigate potential environmental impacts.

The Bluewater terminal will complement other plans to accommodate very large crude carriers including ship channel dredging and Harbor Island development, Strawbridge told the Caller-Times.

That’s because the port expects to build to the capacity of exporting 5 million barrels of crude oil per day, a lot of it coming into the area from North Dakota, Canada and Oklahoma, Strawbridge said.

Moving forward with the Bluewater facility will be contingent on at least two significant factors, Phillips 66 and Trafigura officials noted in their news releases. 

“The joint venture owners expect to make a final decision later this year, pending permit approval and customer volume commitments that support the project meeting the owners’ economic return thresholds,” state the Phillips 66 and Trafigura news releases.