NEW YORK (Reuters) - Energy Transfer LP said on Thursday it was in discussions with potential shippers to build an export facility in Texas capable of handling supertankers, which can transport about 2 million barrels of crude.
The facility would be connected to its Nederland, Texas, crude terminal and a final investment decision has not yet been made, Chief Financial Officer Thomas Long said during a quarterly earnings call for the company.
Midstream companies have raced to add export terminals capable of handling Very Large Crude Carriers (VLCCs) along the U.S. Gulf Coast as exports have surged to records after Washington lifted a ban in late 2015.
U.S. crude exports jumped to a monthly record of 3.16 million barrels per day (bpd) in June as South Korea bought record volumes and China ramped up purchases, data showed last week. A shale boom has helped the United States become the world’s biggest oil producer, overtaking Saudi Arabia and Russia.
Energy Transfer said it expects to take at least two or three years to begin construction on the VLCC project.
The company also said crude transportation volumes rose to a record 4.7 million bpd in the second quarter compared with about 4.2 million bpd last year, thanks to an increase in barrels shipped through its existing Texas pipelines and volume growth in its Bakken system.
During the second quarter, volumes on its Bakken pipeline, or the Dakota Access pipeline system, rose about 20% to average 560,000 bpd.
Last month, the company announced an open season for the Dakota Access pipeline system, soliciting additional shipper commitments in order to expand capacity. Energy Transfer will be capable of expanding that system’s capacity up to 1.1 million bpd over time based upon customer demand, from the 570,000 bpd currently, Long said on Thursday.
The company’s Texas crude pipelines Permian Express (PE) 1, 2 and 3, part of a joint venture with Exxon Mobil Corp, are at full capacity, Energy Transfer said.
“We’re almost complete with an expansion of our Permian Express System. The PE4 expansion will add an additional 120,000 bpd of capacity to our Permian Express pipeline system from Colorado City to Nederland, Texas,” Long said.
The full capacity of the project is expected to be in service by the end of the third quarter.
Reporting by Devika Krishna Kumar in New York; Editing by Bernadette Baum and Marguerita Choy