Global crude markets are hungry for West Texas Intermediate crude oil coming out of the Permian Basin, and this is good news for the economies of Houston and Corpus Christi.
The Corpus Christi ship channel is undergoing some major improvements in preparation of expected increases in oil exports from the Port of Corpus Christi and also to accommodate the larger super-tankers in use today. Texas Railroad Commissioner, Ryan Sitton, expects oil exports from the Port of Corpus Christi alone to rise from one million barrels per day to three million barrels per day.
Speaking during a tour of the Corpus Christi port and channel Sitton said, “Fifty-percent of the growth is going to come from Asia, so we’ve got to get our products to Asia.” Sitton went on to add, ” The Port of Corpus Christi is going to play a vital role in that. Not only because it’s already a big liquid export facility, but because the geography where we are enables ease of construction of pipelines to bring products into this port.”
“We’re talking about going from a million barrels of crude oil a day to three million barrels of crude oil a day, which would be three-percent of the world’s oil consumption,” Sitton said. “That will be tens of thousands of jobs all up and down the entire ship channel, and particularly right here in Corpus Christi.”
The Houston and Baytown areas in Texas also look to cash in on oil flowing out of the Permian Basin to crude markets across the globe. Houston is number two in U.S. oil exports falling right behind the Port of Corpus Christi. Houston has the capacity to ship around 1.7 million barrels per day according to Timm Schneider, senior managing director for Evercore ISI.
The problem with the Houston ship channel is congestion. In 2015, fog shut down the channel for approximately 680 hours which led to long lines of ships waiting for a berth. However, because of the facilities along the 52-mile Houston Ship Channel, Houston should remain one of the largest petrochemical ports in the world for a very long time.
Oil production in the Permian Basin is nearing 2.5 million barrels per day and experts are suggesting that production could exceed 4 million barrels per day if global demand, and price, require it.