Enterprise Products Partners LP said on Wednesday it expects to take about two years to construct its oil export project called Sea Port Oil Terminal, or SPOT, in the U.S. Gulf of Mexico.
Permitting for the terminal was expected to reach the final stages by the end of the first quarter of 2020 and final approval was expected during the second quarter, a company executive said on its second quarter earnings call.
Enterprise Products signed long-term agreements with Chevron Corp to support the development of SPOT, which will be designed to efficiently load supertankers capable of transporting about 2 million barrels of crude.
The company said it is building a new Permian crude pipeline but declined to say whether it would be called Midland-to-Echo 3.
Analysts expect Enterprise to expand its Permian crude oil transportation system via a possible Midland-to-Echo 3 pipeline with connectivity to the Houston ECHO terminal after the agreements with Chevron.
"We have now joined the port and moved our efforts on the Houston Ship Channel to Washington, for funding and permitting of a significant expansion of the ship channel in an expedited way," Jim Teague, chief executive of Enterprise's general partner, said on the call.
The energy industry is working with the Port of Houston to accelerate the process widening the ship channel from about 530 ft to 700 ft (161.5 m to 213.4 m) through local funding, Enterprise said.
"As we see it, every bit of incremental U.S. energy growth is headed for exports and most of that is pointed toward Houston," Teague said.
The company forecast U.S. crude exports to increase from about 3 million barrels per day today to 8 million bpd in the next few years as shale production continues to climb.
A shale boom has helped make the United States the world's biggest oil producer, ahead of Saudi Arabia and Russia.
Output in the Permian, the largest oil basin in the country, is expected to climb by 34,000 bpd, to a fresh peak of about 4.21 million bpd in August, according to government data.
The company's profits rose in the second quarter thanks to record volumes on its liquids and natural gas pipelines as well as a strong performance in the natural gas and petrochemical segments.
The pipeline operator posted earnings of 55 cents a unit, four cents above Refinitiv estimates. Its revenue declined to $8.28 billion, missing Wall Street's estimate of $8.67 billion.
Reporting by Devika Krishna Kumar
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