reserve refill
DOE taps Texas companies for $56M in Strategic Petroleum Reserve deliveries
Two companies with ties to the Houston area have been awarded federal contracts totaling nearly $55.8 million to supply about 1 million barrels of crude oil for the nation’s depleted Strategic Petroleum Reserve.
Houston-based Trafigura Trading will provide two-thirds of the oil, and Dallas-based Energy Transfer Crude Marketing will provide the remaining one-third. Energy Transfer, the parent company of Energy Transfer Crude Marketing, operates a 330-acre oil terminal at the Houston Ship Channel.
The U.S. Department of Energy (DOE), which awarded the contracts, said Trafigura and Energy Transfer will deliver the crude oil from Dec. 1 through Jan. 31 to the Strategic Petroleum Reserve’s Bryan Mound storage site near Freeport.
The Strategic Petroleum Reserve, the world’s largest emergency supply of crude oil, can hold up to 714 million barrels of crude oil across 61 underground salt caverns at four sites along the Gulf Coast. The reserve currently contains 410 million barrels of crude oil. During the pandemic, the Biden administration ordered a 180 million-barrel drawdown from the reserve to help combat high gas prices triggered by Russia’s war with Ukraine.
The four strategic reserve sites are connected to 24 Gulf Coast refineries, and another six refineries in Kentucky, Michigan and Ohio.
“Awarding these contracts marks another step in the important process of refilling this national security asset,” U.S. Energy Secretary Chris Wright said.
In March, Wright estimated it would take $20 billion and many years to fill the Strategic Petroleum Reserve to its maximum capacity, according to Reuters.