New pipeline investments in Corpus Christi are surging and could make it a popular export alternative to Houston, where congestion is crowding out midstream companies, according to a report released last week by Morningstar, a Chicago-based research firm.
Corpus Christi already has three refineries, 10 pipelines that deliver crude from the Eagle Ford and one pipeline from the Permian. But as production rises in the both basins, Corpus Christi is becoming a crude export hub, where there is more real estate for marine docks and storage infrastructure and space for larger crude tankers, according to the Morningstar report.
Corpus Christi’s role in the midstream market depends on high oil production in the Permian. Two new pipeline projects have been proposed to bring crude from the Permian to Corpus, and if approved and completed on schedule, they would add a capacity of one million barrels a day by the end of 2019.
“Given that existing refining capacity and dock infrastructure in Houston is congested already, the investment to get incremental new barrels delivered to tidewater at Corpus Christi for export makes sense. The midstream planners are doing their part to anticipate that infrastructure need and make ready for a new flood of shale crude,” the report said.
But these predictions could be upset by an oversupply in crude exports, which would drive down demand and oil prices and cut production before new pipelines are built, the report said.