Carlyle Group’s Oil Terminal Exit Starts Shakeout of U.S. Crude Exporters

SEATTLE (Oil Monster): Carlyle Group LP’s decision to abandon a Texas crude export project this month marked the start of a shake out among the nine deep water terminal proposals vying to export U.S. shale, said investors and analysts.

Its departure from the venture “is a testament to how heated the field is,” said Michael Tran, a managing director at RBC Capital Markets in New York. Rivals without Carlyle’s deep pockets “could face a similar fate,” he said.

The five U.S. crude export projects currently under federal review would add a combined 8.36 million bpd of export capacity, about two-thirds of current U.S. oil production.

The Carlyle facility, which is under review by a different federal authority, would boost that total even more. Its construction partner, Berry Group, has vowed to continue the project.

Carlyle, a Washington D.C.-based private equity firm, launched its $1 billion Corpus Christi, Texas, export terminal a year ago, challenging projects now underway by trader Trafigura AG and pipeline operators Enbridge Inc, Energy Transfer LP and Phillips 66, among others.

Carlyle’s Lone Star Ports aimed to store up to 4 million barrels of crude and load 1.4 million barrels per day (bpd) onto tankers from an island near Corpus Christi. It quit the venture without providing a reason.

Ferris Hussein, a Carlyle managing director, declined to comment on the reason for its withdrawal.

Magellan Midstream Partners LP also dropped plans to develop its own onshore export terminal near Lone Star’s project. It continues to explore options with others to develop an oil export facility in Corpus Christi, spokesman Bruce Heine said.

 Courtesy: www.reuters.com