The booming Eagle Ford shale deposits in southeast Texas offer regional refiners the opportunity to whip up a crude cocktail cheaper than imported and domestic offshore competition.
The cost benefits will get even better when new pipelines enter service that will bypass current bottlenecks and give refiners access to surging supplies of cheap crude from North Dakota and Canada.
Shale oil from the Eagle Ford deposit in southeast Texas has come on strong this year, rising to 272,000 barrels per day (bpd) in June from 70,000 bpd in April, according to energy consultancy Bentek. Some experts say it could top 400,000 bpd by 2013, enough to virtually back out all the region's imports from Nigeria.
The short shipping distance from the Texas shale fields to refiners on the Gulf Coast -- home to 40 percent of the nation's capacity -- will deliver the region a cheap source of high quality crude that should curb import requirements.
As production continues to rise it will knock out OPEC crude of similar quality like Algeria's Saharan Blend and Nigeria's Brass River. Reuters estimates show Gulf Coast refiners are already processing up to 200,000 bpd of Eagle Ford crude.
Source: Reuters
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