Canada’s oil producers have gained a new gateway to one of the world’s most important energy hubs with the opening of Enbridge’s Houston Oil Terminal (EHOT), strengthening market access to the U.S. Gulf Coast refining sector and international exports.
The terminal, which opened in July, represents the final link in the company’s integrated transportation network connecting northern Alberta’s oil sands production directly to the Houston region, home to the largest concentration of refining and export infrastructure in North America.
“EHOT gives Enbridge’s liquids pipelines business a true Houston footprint,” Matt Gagnon, Enbridge’s director of business development, said in a statement.
“It ties our system from Edmonton all the way to the U.S. Gulf Coast.”
The terminal is the latest example of what Enbridge CEO Greg Ebel called a "wave of development" that is unfolding across North America.
“What is becoming increasingly clear is that the energy industry has re-entered a growth phase somewhat reminiscent of the 2012-15 time period,” Ebel said during the company’s second quarter update on July 31.
“As producers’ confidence improves and the policy environment becomes increasingly supportive of growing production, new infrastructure will be required to support future growth across the continent.”
The U.S. Gulf Coast region, known in industry circles as PADD III, is the world’s leading refining hub for heavy oil, Canada’s main energy product by value.
It is also the centre of North American oil exports.
According to the U.S. Energy Information Administration (EIA), Canada supplied about 20 per cent of all U.S. Gulf Coast oil imports so far this year, indicating a significant opportunity for further growth.
Canadian heavy oil is processed at the region’s refineries, as well as re-exported through its terminals to buyers around the world.
“The U.S. Gulf Coast hosts one of the most extensive clusters of energy infrastructure in the world, owing to its 140-year history at the centre of the petroleum industry,” said Joe Calnan, vice-president of energy with the Canadian Global Affairs Institute.
“The refinery cluster in the U.S. Gulf Coast boasts the greatest concentration of heavy, sour crude processing capacity anywhere in the world. Many of these facilities were designed to run heavy grades from Venezuela and Mexico, making them a natural fit for Canadian barrels.”
By linking directly into Houston’s refining, storage and marine export network, the new EHOT facility provides Canadian oil producers with more potential refining customers on the U.S. Gulf Coast, and additional pathways to reach global markets.
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