The Flexibility of Moving Crude by Water is Creating a Paradigm Shift in the Movement of Crude
Strategize & Assess Opportunities for Using Barges and Tankers to Move Crude to the Most Lucrative End Markets:
As the U.S. crude oil production boom continues, the flexibility of moving crude by water, especially as a complement to rail, is creating a paradigm shift in the movement of domestic crude around the country. Crude-by-water deliveries to domestic refineries have spurred significant build-out and use of Jones Act tankers and barges to move crude. Add to that the flexibility of combining tankers and barges with rail and the economics can be very good indeed – depending on price differentials, market demand, and infrastructure, especially transshipment terminals. And now, as restrictions on crude exports loosen, the market will see further influence of moving crude by water as products increasingly are exported with minimal processing.
Assessing the economics of developing strategies to move crude by water is complex. Projected production, pipeline availability, pricing differentials, and accounting for the costs of moving crude by water all need to be considered and then reviewed regularly as markets shift. Matching production results with the most optimum markets and water routes is key. For MLPs, assessing what assets to invest in, be it tankers, barges or terminal facilities is critical to success in getting new oil production to the most lucrative markets. One thing is certain: the crude by water sector will continue to change rapidly with new plays, new pipeline capacity and shifting arbitrage opportunities.
To provide a forum for stakeholders to assess options and markets and develop cost-effective strategies, Infocast has developed our Crude by Water Summit, taking place January 14 & 15, 2015 in Houston, TX. This is the event where E&Ps, railroads, terminals, refineries, and the investment community come together to strategize and assess opportunities in this fluid and evolving transportation sector, while keeping costs down and the economics viable. This is the meeting to meet, brainstorm and compare notes on the most recent challenges and solutions for successfully moving crude by water. We look forward to meeting you in Houston in January.
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