How did Oil and Gas do in 2019?
No need to wonder, we will have that answer with Sean Strawbridge, the CEO of the Port of Corpus Christi joining us on today’s show.
Welcome to end the oil patch radio show. I’m your host Kimball auto and today we have a great show lined up for you. We will be joined by Sean Strawbridge is CEO of the port of Corpus Christi talking about How Did Oil and Gas Do in 2019. Also, we will be joined by the editor of show magazine, David Blackman, who is going to talk to us about the year end reports that have been coming out from all the different associations about how oil and gas did in 2019 in Texas so this is a show that you don’t want to miss, but before they join us, let me tell you about the fastest growing energy group in Texas. It’s called teak Texas energy advocates coalition. It’s free to join if you’re interested in growing your business, networking in the oil and gas sector. This is an organization for you.
Speaker 1: (00:54)
For more information and to sign up for free, go to TX energy advocates.org again, that’s TX energy advocates.org. Also I’d like to encourage you to sign up for a free digital issue of shell magazine in which you’ll get the latest issue absolutely free. All you have to do is go to shale, S H a L E M a g.com. Again, that’s S H a L E mag.com for more information and now it’s time to bring on our guest Sean Strawbridge who is the CEO of the port of Corpus Christi. Sean, thank you for joining us today here at in the oil patch radio show. Thank you for having me back. You know we’ve had you on a couple of times in 2019 and you guys do such a great job of communicating all of the amazing things that are happening very quickly there at the port of Corpus Christi. So you guys just released your 2019 tonnage report.
Speaker 1: (01:55)
I want to just cover a little bit of it with you. I know we don’t have a lot of time cause you’re super busy. But let me just read a little bit to get our listeners up to speed. So the port of Corpus Christi is becoming quickly obviously the center of export activity. Sometimes looking throughout the month you guys have overtaken Houston, Beaumont and Louisiana combined for a total volume amount on a monthly basis. And then also with the new export terminals that you guys have coming online and the increased connectivity, the port does seem to be poised to continue its string of records setting exporting numbers. Now that being said, the port of Corpus Christi, your report stated that you guys ended your tonnage in December at 13.8 million cargo tons and 122.2 million cargo tons for the entire year and that is a 16 million ton improvement over just 2018 alone in one year. Now that is some significant growth and so it specifically is pointing towards uh, the exporting on, uh, oil and liquified natural gas. My question to you is what is actually happening at the port of Corpus Christi? In this area.
Speaker 2: (03:13)
Well, Kim, thank you for the, uh, the recognition. Uh, we were very excited about the, the, the increased volumes that we’re seeing primarily from the energy export market. Uh, and as you said, crude oil and liquified natural gas are our two single largest, uh, commodity segment increases in 2019 and that’s primarily a result of the new pipelines that have come online in late 2019, uh, crude pipelines from the Permian basin. And that’s also a result of the shinier Corpus Christi liquefaction, uh, additional train, their second train coming online, uh, in September of 2019. And really it’s a result of a lot of planning and thoughtfulness about the needed infrastructure to handle the growth in the energy export markets. And we’ve seen some geopolitical events that have certainly pushed more volume. Our way. Uh, most notable in 2019 was the, the Saudi, uh, oil production fields being, uh, being attacked, uh, which brought down some of their production.
Speaker 2: (04:29)
And what you’re really seeing is you’re seeing over the last four years since the export ban on us produced, crude oil was repealed. Many yhought this would effect ow did oil and gas Do in 2019, with most expecting bad results. You’re, you’ve been seeing a lot of what I would call tire kicking by, uh, foreign, uh, demand centers, uh, testing the quality of American crude testing, the uh, availability, the consistency, uh, and the competitiveness and [inaudible]. And we’re real excited to be right at the, the forefront of that now that customers overseas are really recognizing that there is a higher quality, uh, of crude coming from the United States. And certainly quality here in Corpus Christi is important to us. We think we’ve got some pretty high quality specs given the fact that the pipeline’s coming from the Permian and the Eagleford are not commingling with other North American creeps rates. That’s really, uh, attractive for, uh, the discerning and global crude customer. Uh, quality is everything I think in, in those markets. So, uh, all the volume increases that we’re seeing is really a culmination of a lot of effort, a lot of capital, a placement that both the port authority and our customers have been engaged in over the last four years and we’re just excited to see that success. And eh, we at this point believed that we’ll continue to see that, uh, well into 2020.
Speaker 1: (05:54)
Well you know, you, you mentioned earlier that it has taken planning and I’m a firm believer and a huge fan and so the listeners know, had you on the show what the port commissioners and what you have been doing for years truly is great leadership. At the risk of sounding like I’m one of your biggest fans, I really am because I’ve seen you take you in the port commissioners and a lot of planning, a lot of great leadership change an entire region and there’s so much talk about great things with the port. You guys are a renewable port if you will. You’re taking advantage of making things greener as well. And with all of the growth, all of these things that are happening, we’re going to move into 2020, and I’m, I’m curious to know, what do you see happening at the port for 2020? Will we continue to see these, a record breaking numbers coming out of there and two, with the new phase one of China, knowing 50 billion of exports will occur, uh, LNG and you know, other oil and gas products, crude oil. I would imagine the majority is going to come out from the port. Talk to me about 2020. What does that look like for you guys?
Speaker 2: (06:56)
Well, I think you’ve hit the nail on the head. The most of the demand centers that we have, see the energy exports going to, are not China. That is a result of the trade dispute that the United States has been embroiled in with China over the last couple of years. It’s exciting to see some progress there. We’re very excited about the, uh, the recent, uh, phase one signing. Uh, yesterday I believe, uh, uh, with, uh, with the Trump administration in China and we, we certainly think that, uh, China will be the next leg up in our growth here in Corpus Christi. We also anticipate some additional pipeline con activity in the Corpus Christi. Most notable, the, the red Oak line, which is a Phillips 66 line that it’s being, uh, deployed from Cushing, Oklahoma down to Sealy, Texas, and then splitting off to Corpus Christi and over to Beaumont. That line will be the first line that the port of Corpus Christi will have access to the other North American crude slates.
Speaker 2: (08:02)
Uh, right now we’re essentially a, a, a two trick pony, if you will. Other very large ponies are the Permian basin and the Eagleford shell producing fields, which is over half of the total U S, uh, crude production is in those two fields. These two affect How Did Oil and Gas Do in 2019 but also helps predict how well our industry will do in 2020. But, uh, the fact that we will now have access to the remaining, uh, creed stacks in North America, we just think that that is going to continue to propel our growth. And as such, and giving the certainty that, uh, we, uh, that these pipelines bring, uh, it gives us an ability to really be deliberate in our placement of capital and the timing of that for the incremental and additional infrastructure and capacity needed to handle, uh, those increased volumes and we think 20, 20, uh, will will be more of the same. Uh, we’ll see more crude exports. Uh, shinier is, uh, currently constructing train three.
Speaker 2: (08:58)
Uh, they have said that train three will likely not come on until their plan right now is 2021. But when you look at their historical performance of completing their, uh, construction’s ahead of schedule, uh, it would not surprise me if we saw additional LNG in 2020 with the, uh, uh, an early, uh, commissioning of train three. Again, that is not what shinier has said, but just looking at their, uh, historical, uh, excellent performance in their, uh, construction. Uh, you know, that may be a, that may be another factor. The other area that we’re seeing a lot of growth in, uh, Kim is the, the natural gas liquids. A lot of, uh, additional fractionators are coming online. And so we’ll see more LPG. I will see more butanes at Sam’s in the lichen and, and so I, we’re really, uh, excited about, uh, about 2020 and then as 2021 and into the foreseeable future. Some of these large investments from companies like, uh, uh, Saudi Arabia basic industries corporation and their joint venture with ExxonMobil chemical, uh, we’ll see more of a, uh, petrochemical, uh, component to our, our exports. So
Speaker 2: (10:10)
well, we set the table very well, uh, certainly for the, uh, the foreseeable future for more job creation, uh, and more, uh, you know, more prosperity here in the region
Speaker 1: (10:20)
I couldn’t agree with you more. And Sean, thank you for, for joining us. I know you were busy today and I’m glad you jumped on the line here to talk to us. Thank you again for what you guys are doing. The port commissioners they’re doing. And of course, most importantly, the valuable employees that you guys have, that we see working day in and day out out in the community, supporting what’s happening out there in Corpus and the community. Thank you for joining us today on an oil patch radio show to talk about How Did Oil and Gas Do in 2019!