Four projects hang in the balance to build deepwater export terminals capable of loading Very Large Crude Carriers (VLCCs) in the Gulf of Mexico. The uncertainty has put development of other oil infrastructure on hold until investors have more clarity. Could an incoming Trump administration help break the logjam?
East Daley Analytics tracks the four offshore projects in the Crude Hub Model, shown in the map. They have been on the books for ~6 years and only one, Enterprise Products’ (EPD) Sea Port Oil Terminal (SPOT), has received the necessary deepwater port license to begin construction. The others, including Energy Transfer’s (ET) Blue Marlin Offshore Port (BMOP), Sentinel Midstream’s Texas Gulf Link, and Phillips 66 (PSX) and Trafigura’s Blue Water project, are caught up in the permitting process led by the US Maritimes Administration (MARAD).
EPD’s SPOT and ET’s BMOP have been the front-runners to reach a final investment decision (FID) and start construction. Both offer strong pipeline connectivity and the fastest path to operations. Not far behind is Sentinel’s Texas Gulf Link, which was granted a Final Environmental Impact Assessment (FEIS), the most arduous piece of the regulatory process, in August 2024. With the FEIS out of the way, a record of decision and final deepwater port license shouldn’t be far behind.
Enterprise was the first out of the gate to start the permitting process for SPOT, and the first to gain the coveted deepwater port license from MARAD. EPD received the deepwater license in April 2024, but has yet to take FID.
SPOT initially was backed by volume agreements with Chevron (CVX). But CVX later rescinded its commitments, and EPD is trying to bring other customers on board to commercialize SPOT. The project would have exceptional supply optionality by using Enterprise’s ECHO Terminal to source volume. ECHO connects directly to the Permian Basin, and links to the Houston and Cushing markets via the Seaway pipeline.
ET recently said the Blue Marlin project had passed an internal front-end engineering and design (FEED) study to ensure it can move forward. With a heads of agreement (HOA) with Total Energies, BMOP may be in the best position to move forward, even though the project is still working towards a FEIS. BMOP will also have strong connections through ET’s Nederland Terminal. ET has said it expects up to 45% of its crude exports to be of Canadian origin via the Keystone/Marketlink and Cushing markets, in addition to direct access to neat Bakken production. The Blue Marlin project has the added advantage of using existing infrastructure, so the timeline to operations should be quicker than the other proposals if it can receive a deepwater license.
PSX and Trafigura’s Blue Water Terminal may have the toughest road, since the Environmental Protection Agency revoked the project’s original draft environmental impact statement, and the partners had to resubmit it. The Blue Water project has the most direct access to Permian production, but also limited connectivity to Cushing and Houston barrels. We will continue to monitor developments in the Crude Hub Model – Kristy Oleszek Tickers: CVX, EPD, ET, PSX.
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