The logistical system for oil in the Gulf of Mexico is comprised of refining facilities, pipelines, and export terminals.
With the ban on U.S. crude oil exports remaining in place for many years, refining companies constructed refineries near major export terminals in the Gulf of Mexico in order to export their petroleum products. These crude oil (or oil) terminals are similar to hubs or industrial complexes and consist of pipeline networks, storage facilities, refining facilities, and ports.
The logistical infrastructure in the U.S. (a country which, up until recently, was almost exclusively an importer of crude oil instead of an exporter) is mainly composed of pipelines that enable the transport of imported crude oil or crude oil from a storage facility to refining facilities to be processed into petroleum products that are then delivered to domestic consumer regions. However, the recent rapid increase in LTO production in the U.S. has brought considerable change to the flow of crude oil logistics in the Gulf of Mexico. The tight oil or condensate produced in the Permian and Eagle Ford basins or crude oil imported from Canada are transported to refining facilities or export terminals in the Gulf of Mexico.
In addition to this trend, with the lifting of the export ban on crude oil exports as of December 18, 2015, crude oil produced in various regions, including LTO or condensate produced in Eagle Ford or Permian, WTI, and Canadian tight oil can now also be exported. The total transportation capacity of pipelines transporting crude oil from nearby inland LTO-producing regions, such as the Permian, Eagle Ford, and Cushing oil fields, and the offshore oil fields in the Gulf of Mexico to refining facilities or export terminals in the Gulf of Mexico stands at about 2.2 million b/d. Major pipelines are as shown in Table 5-2.
Table 5-2. Major Pipelines in the Gulf of Mexico (U.S.)
Pipelines Transportation capacity
(One thousand b/d)
Plains All American Basin 450
Enterprise Eagle Ford 350
Magellan Longhorn 275
Magellan/PAA Bridgetex 300
Sunoco West Texas Gulf 300
Sunoco Permian Express phase 1 150
Enterprise Seaway 850
Transcanada Gulf Coast 300
Shell Houston-to-Houma 350
ExxonMobil Pegasus 95
Kinder Morgan KMCC 300
Louisiana offshore oil port 300
Cactus 330
Plains All American/Enterprise Eagle Ford JV 470
Total 2,175
Note: Some pipelines are interconnected; therefore, the capacity of each pipeline and the total shown in the table above may vary.
Source: Platts (2016)
Figure 5-2 shows the location of the major crude oil pipelines and export ports in the Gulf of Mexico. The region shaded in blue is the Permian Basin, while the region shaded in pink is the Eagle Ford Basin. These two regions are connected via pipelines to refining facilities located in the Gulf Coast.
Figure 5-2. Major Crude Oil Pipelines and Major Export Ports in the Gulf of Mexico (U.S.)
Source: Platt, 2016
The refining facilities located near the Gulf of Mexico are supplied with crude oil imports from the U.S., Canada, and other crude oil producing regions. In the past, the crude oil imported through the Gulf of Mexico was mainly transported to refining facilities in the Midwest. The refining capacities of the facilities in the Gulf of Mexico are approximately 8,270,000 b/d.
Table 5-3. Capacity of Refining Facilities in the Gulf of Mexico
Category Refining capacity
(One thousand b/d)
Proportion within the U.S.
Gulf Coast (Texas) 4,607 25.5%
Gulf Coast (Louisiana) 3,665 20.2%
Total in U.S. 18,058 100%
Source: EIA (https://www.eia.gov/dnav/pet/pet_pnp_unc_dcu_r3c_a.htm; date of access: October 11, 2016) Table 5-4. Major Refining Facilities in the U.S. Gulf Coast
Refining Facility (Operator) Refining Capacity (One million b/d)
Port Arthur /Netherland region
Motiva 610
ExxonMobil 359
Valero 310
Total S.A. 174
Houston region
Valero 90
LyondellBasell 268
Petrobras 100
Shell 327
ExxonMobil 561
Texas City /Galveston region
Marathon 460
Marathon 80
Valero 245
Source: Platts (2016)
Export and import terminals usually store crude oil or petroleum products supplied through pipelines prior to export or store imported crude oil or petroleum products prior to domestic transportation via pipelines or railway. Therefore, one of the most critical functions of these terminals in the Gulf Coast is storage. Operators in these terminals charge fees for providing storage facilities to exporters or oil refineries and for providing loading or off-loading services at the dock.
This is why terminals are located close to domestic crude oil producing regions with pipelines and at ports for the export and import of crude oil or petroleum products. The storage capacity of the ten major terminals in the Gulf Coast is approximately 1,800,000 B.
Table 5-16. Storage Facilities at Oil Terminals in the Gulf Coast
Storage Facility Storage Capacity
(One million B) Louisiana Offshore Oil Port (LOOP) 58 International-Matex Tanker Terminals (IMTT) 16.3
NuStar Energy LP 11
Plains All American Pipeline, LP 8.3 Enterprise Crude Houston Oil (ECHO) 5.25
Enterprise Oil Tanking (OTI) 8.4
Enterprise Oil Tanking Appelt (OTI) 6.9
Magellan East Houston 4.8
Port Arthur-Beaumont-Nederland 41.5
Corpus Christi 19
Source: Platts (2016)
The crude oil terminals in the Gulf Coast maintain large-scale storage facilities, import crude oil through ports, store crude oil in terminal storage facilities, or transport crude oil to nearby oil refining facilities. As mentioned above, in more recent years, the crude oil produced nearby (such as at the Permian and Eagle Ford basins) is increasingly stored in storage facilities at the Gulf Coast terminals before it is transported to a nearby refining facility or exported through the terminal ports or docks.
In the next section, we will examine the crude oil terminals located in Houston, Netherland/Port Arthur, and Corpus Christi in greater detail.
Section 3. Major crude oil export terminals in the Gulf of Mexico