As the U.S. shale oil industry experiences a slowdown, a deepwater port off the Texas coast is grappling with the challenge of securing customers. The ambitious multi-billion-dollar export port, known as SPOT (Sea Port Oil Terminal), was envisioned by Enterprise Products Partners during the peak of the shale oil boom. However, regulatory delays spanning multiple years, a waning interest from commercial backers, and the deceleration of U.S. shale production have left SPOT and its three rival projects without any confirmed customers, according to energy industry executives.
Despite being the first project to receive a license from the U.S. maritime regulator for a deepwater port capable of loading two supertankers, SPOT faces significant hurdles. The escalating cost of the project, now estimated at about $3 billion, has far surpassed the initial projection of $1.85 billion. Furthermore, the absence of long-term customer contracts and joint venture partners has impeded the project’s financial progress. As a result, the anticipated start-up date for the project has been pushed to 2027.
In an effort to attract customers, Enterprise has offered loading fees to potential clients, with the largest volume customer being offered a $1 per barrel rate for oil transferred from its Houston storage terminal. However, these fees are notably higher than the costs associated with loading at other ports, such as Corpus Christi, Texas, which presents a competitive challenge for SPOT.
The ongoing struggles have also led to the withdrawal of early backers, including Chevron and Enbridge, further complicating the project’s prospects. Despite the setbacks, Enterprise maintains its commitment to developing the SPOT project.