Colorado-based research firm East Daley Analytics reported recently that crude oil pipelines to Port of Corpus Christi are operating at or near 90 percent utilization to send some Permian crude to Houston, Beaumont-Port Arthur or Louisiana. Crude oil pipelines are restricted from offering committed service on more than 90 percent of their capacity – leaving 10 percent for uncommitted service. “You can get oil out of the basin,” A.J. O’Donnell of East Daley told Midland Reporter Telegram, “it just may not be to your preferred destination.”
U.S. Energy Information Administration said U.S. crude exports reached a record 4.81 million barrels a day in March – an increase of 82 percent since early 2019. Corpus Christi became the most popular port (53 percent of Gulf Coast crude exports in Q1) because it has less ship traffic than Houston, it can load large vessels, and buyers can source “clean” Permian crude. O’Donnell said exports are important to Permian producers because “domestic demand isn’t going anywhere.”
“We expect oil flows will begin to shift to Houston as pipeline capacity grows scarce,” the East Daley report said, “returning Houston as the leading Gulf Coast export port. To keep Corpus Christi on top, investors need to consider new pipeline expansion.”