Sentinel Secures Commitments for Offshore Crude Terminal
Sentinel Midstream LLC has secured shipper commitments needed to move forward on a proposed $1 billion crude export terminal off the Texas coast, the company's chief executive said on Wednesday.
The firm's Texas GulfLink project is one of eight proposed U.S. deepwater export projects seeking to load supertankers that carry up to 2 million barrels of crude. Sentinel last week became the fifth to apply for federal permits.
Sentinel's offshore facility could begin operations in early 2020 and load up to 2 million bpd from single-point mooring buoys in deepwaters 30 miles off Freeport, Texas, said CEO Jeff Ballard.
It recently acquired shipper commitments that "justify spending the capital to take on this project," he said. Ballard declined to disclose the shippers.
Sentinel is backed by Cresta Fund Management, a Dallas-based private equity company.
U.S. Maritime Administration approval for the project could be received in little less than a year, and construction could take up to 24 months, Ballard said.
The project includes constructing a 42-inch pipeline and up to 15 million barrels of onshore oil storage.
Some executives, traders and analysts said they believe not all of the eight proposed terminal projects - which would have a combined export capacity roughly equal to current U.S. oil output - will get built.
But overseas buyers have expressed "lots of interest" in shipping U.S. crude on fully loaded supertankers, and demand is strong enough to support at least two export facilities, Ballard said.
Reporting by Collin Eaton