Blog January 05, 2016

Last week, two companies racing to export the first U.S. crude shipment under new federal regulations sent vessels that to appear to be moving light sweet grades from Texas ports to Italy and the Netherlands, according to Genscape Vesseltracker.

First, the Bahamas-registered Theo T sailed from NuStar’s Corpus Christi, TX, facility the night of December 31, 2015, with a declared destination of Trieste, Italy. Next, the Malta-registered Seaqueen moved from Enterprise Products Partners’ Houston terminal the afternoon of January 1, 2016, with a stated destination of Rotterdam.

The two shipments mark the first crude exports stemming from the lifting of the U.S. crude export ban in December 2015.

NuStar spokeswoman, Mary Rose Brown, said Monday, January 4, 2016, that the Theo T is carrying a crude export shipment, but declined to give details on the trade. An Enterprise official could not be reached for comment on the Seaqueen or its contents.

Genscape considers market intelligence and analysis to determine the type of crude or product on a ship, along with tracking intelligence provided by Genscape Vesseltracker. In the case of these exports, the vessels both fit the profile of expected crude shipments announced previously by the companies.

The Theo T is slated to land on January 20, 2016, while the Seaqueen is expected to arrive January 17, 2016, according to Genscape.

Nustar’s shipment is loaded to 11.9 meters draught, or about 53,000 tons, which is close to 380,000 bbls of light crude. Total crude carrying capacity for Enterprises’ shipment is just slightly over 800,000 bbls, and with a draught of around 12 meters. Genscape estimates the ship is carrying 550,000 bbls of light crude, which equates to 77,000 tons.

While the market economics might not favor moving U.S. light crude into European refining hubs at the moment, market observers said these shipments could be test batches at various plants to see how the grades work in European refineries. European traders would know the crude’s value once arbitrage trading windows open wider.

The race to become the first exporter of crude outside of Canada without a license became competitive in late 2015 with NuStar and Enterprise vying for the crown.

Houston-based Enterprise was the first to fire a salvo in the battle, issuing a press release on December 23, 2015, stating that the company planned to load a tanker with 600,000 bbls of U.S. domestic light crude during the first week of January 2016. The release said that the tanker would load at Enterprise’s terminal on the Houston Ship Channel and was believed to be the first export of crude allowed following the formal lifting of the ban on U.S. crude exports ended earlier in December 2015.

San Antonio-based NuStar announced on December 30, 2015, that it planned to load a tanker at its North Beach Corpus Christi terminal with Eagle Ford crude/condensate on December 31, making this cargo the first one exported under the new rules signed by President Obama on December 18. NuStar said that the transaction involved ConocoPhillips as the seller and Vitol as the buyer. If Vitol plans to move the recent cargo to its refinery in Cressier, Switzerland, the ship should travel to Fos-Sur-Mer, France, where the crude can then be piped to the refinery.

Genscape and Vesseltracker have combined their extensive proprietary energy monitoring networks to launch the world’s most comprehensive and accurate picture of global shipping. Using Genscape Vesseltracker data, the North American Waterborne Crude Report provides a weekly summary of imports, broken down by crude type and delivery port. Additionally, the report provides freight costs, loading volumes, and destination data for Jones Act ships at key terminals, plus an analysis of the market implications of those movements. To learn more about the North American Waterborne Crude report, or to request a free trial, please click here.

Genscape Vesseltracker runs one of the largest privately owned AIS receiver networks on the planet, combined with the largest AIS Satellite constellation currently available. To learn more about Genscape Vesseltracker, or to request a free trial, please click here.