Posted on July 2, 2019
With the Port of Corpus Christi expected to become the nation’s top crude oil export hub over the next decade, now is a good time to buy or sell a crude oil export terminal along the South Texas waterway, industry analysts said.
Flint Hills Resources has become the third company over the past two months to put a Corpus Christi export project up for sale. In a statement Wednesday, the Kansas company, controlled by the Koch brothers, confirmed hiring J.P. Morgan to put its Ingleside Crude Oil Export Terminal on the market and explore options for a either a sale or a partnership.
The proposed sale comes as Houston pipeline operator Enterprise Products Partners looks to sell its 50 percent stake in a recently completed crude oil export terminal along the Corpus Christi Ship Channel. The Washington private equity firm The Carlyle Group is also seeking to sell a 25 percent stake in a proposed crude oil export terminal on nearby Harbor Island.
Houston oil company Occidental Petroleum sold its Ingleside Crude Oil Export Terminal to another Houston company, Moda Midstream, in August.
John Coleman, an analyst at the global energy research Wood Mackenzie, said sellers are trying to take advantage of peak prices just before construction ends several pipeline and export terminal projects expected to make the Port of Corpus Christi the leading U.S. crude exporter, surpassing the Port of Houston.
“This doesn’t take away from the thesis that Corpus Christi is prime to be a major crude export volume hub,” Coleman said. “It’s people getting ahead of that story and maximizing value for some of their non-core assets.”
Midstream Moves: Enterprise seeks to sell stake in Corpus Christi crude oil terminal
It’s not clear why Flint Hills Resources has its facility on the market, but reasons for the other sales vary. Occidental sold its facility to fund more exploration and production activity in the Permian Basin of West Texas. Enterprise is reportedly selling its stake to focus on its Houston area projects while The Carlyle Group would reportedly use proceeds from its sale to underwrite its $1 billion Harbor Island project.
Looking ahead, Coleman believes that private equity-backed pipeline and export terminal operators will be the most likely buyers, looking to make money as the port emerges as an export hub.
“Companies are trying to capitalize on the momentum that they sense about Corpus Christi,” Coleman said.
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Flint Hills Resources bought the 115-acre terminal in 2009. Located on part of a former naval base, the facility has storage tanks that can hold up to 3.5 million barrels of crude oil and is connected to several pipelines in the area. A listing price has not been disclosed, but company executives assured that the facility will continue operations during the sales process.
“Almost a decade ago, we had a vision that our Ingleside terminal would help us capitalize on the tremendous growth of crude oil imports and exports in this region,” Flint Hills Resources CEO Jeff Ramsey said in a statement. “We’ve achieved that vision and now with our expansion project, this marine terminal and loading operation is poised to reach the next level in the global crude oil business.”
Source: chron.com
