SemGroup Adds to Houston-Galveston's Newfound Net-Exporter Status

SemGroup Adds to Houston-Galveston's Newfound Net-Exporter Status
A unit of SemGroup's newest deep-water dock along the Houston Ship Channel can handle up to Suezmax-size vessels.

Earlier this week, the U.S. Energy Information Administration (EIA) declared that the port district of Houston-Galveston has – for the first time ever – begun exporting more crude oil than it imported. The district includes the Port of Houston as well as other Texas Gulf Coast ports from Galveston to Corpus Christi.

One company helping the port district to build its net-exporter profile is SemGroup Corp., whose HFOTCO subsidiary this week received the first ship at its recently completed deep-water dock along the Houston Ship Channel. In a written statement sent to Rigzone late Thursday, SemGroup noted that its new “Ship Dock 5” – completed this summer along with the addition of 1.45 million barrels of new crude storage – can handle up to Suezmax-size vessels with 45-foot drafts.

“Our unique position on the Houston Ship Channel provides us vast connectivity from virtually all U.S. production basins to the Gulf Coast refining corridor and the growing export market,” according to Shaun Revere, CEO of HFOTCO. “The completion of Ship Dock 5 demonstrates our long-term commitment to expand with the Port of Houston and the Houston Ship Channel. Our parent company, SemGroup, purchased HFOTCO in 2017 as part of its strategy to diversify its business and capture the tremendous opportunities this waterfront property has to offer. We are glad to be part of a company that shares our vision for this area and will continue to invest in infrastructure to better serve our customers.”

According to SemGroup, HFOTCO constructed the dock from December 2016 to June of this year. The parent company stated that the project entailed installing pipelines linking the HFOTCO storage area to the new dock to facilitate product loading and offloading. In addition, SemGroup noted that HFOTCO’s crude oil capacity and connectivity has more than doubled in the last five years in addition to adding crude oil export capabilities.

HFOTCO owns and operates four other ship docks – each of which also can handle up to Suezmax-size vessels with 45-foot drafts. Moreover, the SemGroup subsidiary owns and operates seven barge docks and approximately 18.25 million barrels of storage capacity on its 330-acre waterfront site on Port Houston property. Recent expansions have also given HFOTCO the ability to handle refined products such as naphtha, jet fuel and other distillate products, SemGroup stated.

“The completion of this dock on the Houston Ship Channel by HFOTCO is a positive development,” Roger Guenther, executive director of the Port of Houston Authority, said in the SemGroup announcement. “This partnership between the Port Authority and the company allows us to optimize our real estate assets and meet our strategic growth plan objective to grow and diversify our business base. It also allows HFOTCO to meet its objectives.”

In its August 20 announcement, EIA stated that crude oil exports from Houston-Galveston exceeded imports by 15,000 barrels per day (bpd) in April 2018. The following month, the difference from Houston-Galveston jumped to 470,000 bpd – nearly one-quarter of the total 2 million barrels per day in U.S. crude exports during the period.


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