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Houston Channel reopens to waiting armada carrying 9 mln bbls crude

Source: Reuters - Tue, 25 Mar 2014 22:26 GMT
Author: Reuters
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By Anna Louie Sussman

NEW YORK, March 25 (Reuters) - More than a dozen tankers carrying some 9 million barrels of crude should soon begin moving into the Port of Houston after officials began to gradually reopen a key waterway that was shut for four days.

The volume of oil trade disrupted by the closure is equivalent to more than a day's worth of total U.S. imports, highlighting the strategic importance of the Houston Ship Channel, even in an era of growing domestic production.

The Channel shut on Saturday after a collision caused an oil spill, creating a backlog of over 100 vessels.

Of those, about 13 were on their way into Houston carrying around 9.4 million barrels, according to Reuters' shiptracking data and calculations.

Authorities have re-opened the Channel for outbound ship traffic, and gave the Houston Pilots "a small window" to allow some inbound traffic to move into the channel during daylight hours.

How quickly inbound traffic will flow depends on the progress of the clean-up operation, said Christos Papanicolau, director of business development at shipping company Charles R. Weber in Greenwich, Connecticut.

"You can't let a ship move into oil-bound waters, so they're going to have to make sure it's adequately cleaned," he said.

The stranded crude tankers, mostly Aframax tankers capable of carrying around 750,000 barrels, hailed from ports as far as the North Sea or as close as the Mexican port of Coatzacoalcos in Veracruz, a two-day voyage. Seven vessels had the Galveston Offshore Lightering Area listed as their most recent port, indicating they were lightering crude off of larger supertankers anchored in the Gulf of Mexico.

One vessel, the King Dorian, entered the Galveston Outer Anchorage South region on March 19 three weeks after picking up a crude cargo in the North Sea on Feb. 26. It has remained in the area at anchor since then, according to Reuters' shiptracking data.

A total of 54 large tankers carrying fuel oil, products, crude and chemicals are stalled outside of the channel, according to the Coast Guard. They'll have their go after the 47 outbound tankers leave, a process that is already underway.

On a typical day, 60 to 80 large vessels, including tankers, freighters, containers and cruise ships, and 300 to 400 tugs and barges move through the channel, according to Coast Guard Capt. Brian Penoyer, who is commanding the cleanup of the 4,000 barrels, or 168,000 gallons (636,000 liters) that flooded Galveston Bay on Saturday.

Since the channel was shut, the nation's second-largest refinery, Exxon Mobil Corp's 560,500-barrel-per-day (bpd) facility in Baytown, Texas, on the east side of Houston, has had to cut production. (Additional reporting by Selam Gebrekidan; editing by Andrew Hay)

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