Valero Refinery Expansions Pushed Forward by Eagle Ford Production Growth - $730 Million

January 31, 2014 Kirk Eggleston

Valero plans to build crude topping units at its Corpus Christi, TX refinery and its refinery in Houston.

The two expansions come with a price tag of $730 million, but will likely be needed if the growth of light-sweet crude oil from areas like the Bakken, Eagle Ford, and Permian Basin continue.

The company's plans include adding a 70,000 b/d unit at the Corpus Christi refinery at an estimated cost of $340 million and a 90,000 b/d topping unit in Houston at a cost of $390 million.

Valero announced plans to add the 90,000 b/d unit at its Houston facility at an estimated cost between $220 - $280 million early in 2013. According to Valero Spokesman, Bill Day, those costs are now projected at $390 million for the 90,000 b/d unit.

Eagle Ford Crude Oil Production Driving Refinery Expansions

Eagle Ford Crude has an API of 50 degrees, and Valero's refineries are accustomed to processing heavier crude from South America. As Valero's Eagle Ford production rates remain strong, the need for its refineries to process the light sweet domestic crude is the push behind both of these initiatives.

Additional production growth will likely lead to even more favorable pricing for domestic crude oil.

“The new units at these refineries will allow the plants to purchase less intermediate feedstocks from outside suppliers.”

— Valero Spokesman, Bill Day

Both refinery units are in the planning phase, so no construction has taken place, but the company intends for both units to be completed by the end of 2015.

Other Valero Downstream Projects in Texas

[ic-l]At the Valero's Three Rivers refinery, which sits atop the Eagle Ford shale, the company built a new pre-flash tower and added logistics in 2011-12 to process more light Eagle Ford crude.

Valero also plan expansions at the McKee Refinery in the Texas Panhandle. The project calls for spending $60 million to increase the crude unit from 170,000 bpd to 185,000 bpd, in order to process more Permian Basin crude.

Corpus Christi LNG Plant One Step Closer To Being Built - Cheniere

December 17, 2013 R.T. Dukes

Cheniere's Corpus Christi Liquefaction Project

A proposed Corpus Christi Liquefaction Plant (LNG Export) is one step closer to becoming a reality.

Cheniere signed a 20-year LNG sale and purchase agreement (SPA) with Pertamina for 0.8 mtpa (90 mmcfd). The deal accounts for just 5% of the plant's proposed capacity, so more contracts are needed before the $12 billion project will be financed.

Pertamina will pay Henry Hub prices plus an undisclosed fixed component. The 20-year deal starts with the first commercial delivery of LNG and can be extended 10-years.

Cheniere will need many more commitments of this size or a few larger commitments to make the LNG plant a reality.

Pertamina Could Get Gas From Sabine Pass if that Facility Is Expanded

While it is exciting news for the Corpus Christi Liquefaction project, it doesn't set any thing in stone. If Train 6 (an expansion) of Cheniere's Sabine Pass LNG export facility is approved and permitted, Pertamina's contract will void and the company will enter an equivalent agreement at Sabine Pass.

Watch More

Read the full press release announcing the SPA at

cheniere.com

Cheniere Energy's Port of Corpus Christi LNG Plant Will Cost $12 Billion

November 13, 2013 R.T. Dukes

Cheniere Energy is closer to making a decision on final investment in its Corpus Christi Liquefaction project.

Cheniere received a turnkey construction commitment priced at $800/tonne of liquefaction. The engineering and construction company Bechtel submitted the contract in September.

Cheniere has plans for up to six trains with 4.5 mtpa capacity each in Corpus Christi, but initial plans call for three trains with capacity of 13.5 mtpa (~1.8 Bcf/d).

At $800/tonne, the construction costs will be $800 x 13,500,000 tonnes = $10.8 billion. Add financing costs and the price tag will easily reach $12 billion.

Read:Port of Corpus Christi Booms on the Back of Eagle Ford Growth

Construction contracts are negotiated early in the process, but a final investment decision will be made by year-end 2014. The decision will come after commercial export contracts are agreed, all regulatory approvals are received, and financing is in order.

Read the company's full third quarter press release at cheniere.com

Cheniere Energy is based in Houston and is further along in buildinga LNG export terminal at Sabine Pass.

Bechtel is a worldwide engineering, construction, and project management firm based in San Francisco. The company has participated in the development of LNG projects in Australia, Equatorial Guinea, Russia, and Trinidad.

Energy Transfer Will Convert an Eagle Ford Gas Pipeline to Liquids to Supply Trafigura Terminal in Corpus Christi

November 12, 2013 R.T. Dukes

Trafigura Terminals Eagle Ford Port in Corpus Christi

Energy Transfer has reached an agreement with Trafigura for liquids capacity that supports the development of a pipeline supplying the Port of Corpus Christi.

Energy Transfer will utilize existing infrastructure to construct an 82-mile, 100,000 b/d pipeline system from McMullen County to the Port of Corpus Christi.

Leveraging underutilized natural gas pipelines allows Energy Transfer to have the pipeline running in 9-12 months.

“This pipeline combined with our deep-water terminal enables Trafigura to offer a complete solution to producers who seek to take Eagle Ford to the broader market.”

— Jeff Kopp, Trafigura's Director of Oil for North America.

Oil Tanker Leaving Port of Corpus Christi

The pipeline will deliver crude to Trafigura's Port of Corpus Christi Terminal, where a $500 million construction project is underway on a second deep-water dock that is 850 ft long and has a draft of 45 ft. Once complete, the terminal will be able to handle Aframax vessels (245 meters or ~800 ft long). Aframax ships are medium-sized oil tankers with capacity of approximately 750,000 barrels.

Trafigura states the facility will be able to handle three medium range tankers and two inland barges at one time.

Eagle Ford Consortium Fall Conference Kicks Off in Corpus Christi

October 29, 2013 R.T. Dukes

The Eagle Ford Consortium's fall conference kicked off yesterday with a tour of the Port of Corpus Christi and continues through Wednesday. The consortium brings businesses and local communities together to ensure both are prepared for future growth.

Conference speakers will address various issues including CNG, education, foreign investment, health care, and current industry developments.