Enterprise Products to provide gasoline outlet

(Enterprise Products Partners)

Enterprise Products Partners will transform two Texas docks into facilities that can send gasoline and other refined products overseas, aiming to capitalize on the nation’s transformation into a net exporter of the materials, the pipeline company said Thursday.

Houston-based Enterprise will transform a dock on the Houston Ship Channel and another in the Beaumont area into export facilities that can handle refined products. The docks will each be able to load 360,000 barrels per day of gasoline, diesel and other products onto ships headed to international markets, likely in South America and Europe, Enterprise spokesman Rick Rainey said.

With the move, Enterprise is hoping to capitalize on sweeping changes in the nation’s energy production and consumption, Rainey said.

Booming oil production from shale and other sources has prompted refineries along the U.S. Gulf Coast and elsewhere to ramp up operations. But at the same time, new vehicle standards issued by the Obama administration are forcing automakers to make more efficient cars that use less gasoline and diesel.

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The result is declining fuel consumption in the United States at a time of increasing production of fuels from refineries.

The Enterprise facilities will provide a solution to the growing output of diesel and gasoline in the United States, Rainey said.

“There needs to be an outlet for those volumes,” he said.

The shift in U.S. fuel demand has been dramatic: In five years, the United States switched from a net importer of 1 million barrels per day of fuels to a net exporter in 2012 of 1 million barrels per day of refined products, according to Enterprise.

With domestic consumption expected to continue declining, more channels for exports will be needed, said Jason Stevens, an analyst for investment research firm Morningstar in Chicago.

“It’s a very savvy move on Enterprise’s part,” Stevens said. “The U.S. crude oil and refined products balances are shifting thanks to shale oil and exports of refined products will make increasing economic sense as the crude oil production volumes continue to grow.”

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Enterprise would not disclose the cost for developing the new facilities, which will tap into an expanded storage network capable of retaining 12 million barrels of refined products. Those storage facilities take products from 10 Gulf Coast refineries, which have a combined output of about 3.3 million barrels per day, the company said.

To transform the docks, Enterprise will need to complete some dredging work and will modify equipment to handle refined products and larger vessels. Only the Houston Ship Channel site was in use, mainly for the shipping of natural gas liquids, Rainey said.

Enterprise expects the Beaumont facility to be completed in the first quarter of 2014, with the Houston Ship Channel site to be finished in the middle of 2014.

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