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US shale development cold harm Gulf import and lightering operations

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Oilfield Technology,

The completion of new US pipeline and rail projects will enable higher volumes of oil shale crude to be transported to the East and Gulf Coast areas and, with the country’s ever-increasing oil production, will further reduce the need for imports. As a result, this infrastructure will also help to eliminate lightering operations in the near future, says an analyst with research and consulting firm GlobalData.

According to Carmine Rositano, GlobalData’s Managing Analyst covering Downstream Oil & Gas, crude oil imports into the East Coast from North and West Africa, which provide primarily light sweet crude oil, and the Middle East, which boasts mostly medium and heavy sour crudes, amounted to approximately 450 thousand barrels per day (mbd) in 2013. This represents an estimated decline of 40% from 2010 levels of 750 000 bpd.

These crudes, which were transported on larger-size Suezmax and Very Large Crude Carrier (VLCC) tankers, were lightered into smaller vessels that delivered the imported oil to their destined refineries.

However, as Rositano says: “Over the past few years, the increase in light sweet Bakken crude oil transported to East Coast refineries has reduced crude oil imports and lightering volumes. New rail tracks, crude storage tanks and machinery that can unload train tank cars quickly are now being built in the Philadelphia area to supply nearby refineries.

Crude oil imports into the Gulf Coast area have also declined significantly as production from the Eagle Ford and Bakken fields has risen. These production levels, combined with new pipeline and rail infrastructure investments, will bring additional volumes of oil into Texas and Louisiana and further reduce imports and lightering activities, says Rositano.

Additionally, the Gulf of Mexico will see its lightering operations dwindle continually while crude imports from Africa are wiped out, as cargoes transported from this region are currently carried on the larger-size Suezmax and VLCC tankers and must be lightered into smaller-size Aframax vessels before being transported to refineries in Texas.

“Based on new projects moving domestic crudes into the Gulf Coast areas, the elimination of African crude imports and associated lightering operations in the Gulf of Mexico could occur as early as 2016,” Rositano concludes.   

Adapted from a press release by David Bizley

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