The US Department of Energy (DoE) via the Hydrocarbons and Geothermal Energy Office (HGEO) has awarded contracts for the exchange of 26 million barrels (mbbl) of crude oil from the West Hackberry site within the Strategic Petroleum Reserve (SPR).
The contracts form part of the country’s ongoing contribution of 172mbbl to an International Energy Agency (IEA) initiative aimed at maintaining stability in global oil markets.
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The West Hackberry SPR site is situated in Cameron Parish, Louisiana, roughly 25 miles south-west of Lake Charles. It has operated since 1988 with 21 underground storage caverns and holds an authorised storage capacity of 220.4mbbl.
Deliveries of crude will begin immediately as part of these contracts, according to the DoE.
The department clarified that companies can begin scheduling their deliveries now, as it aims to address short-term supply issues and bolster the country’s energy security.
As part of these contracts, the DoE will proceed with a crude oil exchange involving 26mbbl, with the oil set to be replenished, along with additional premium barrels, by the following year.
The DoE stated that this process is intended to maintain energy security and provide benefits to the public without taxpayer expense.
HGEO Assistant Secretary Kyle Haustveit said: “Through this emergency exchange, the department is taking swift action to support near‑term supply needs while strengthening the SPR for the long term.
“By returning additional premium barrels at no cost to taxpayers, this exchange reinforces market reliability today and delivers meaningful value to the American people when those barrels are returned.”
This latest round of exchange activity follows a recent request for proposals from the DoE. It builds upon earlier actions that have resulted in the award of around 55mbbl of crude from the Bayou Choctaw, Bryan Mound and West Hackberry sites.
More than 10mbbl from these previous exchanges have already entered the market.
The current contracts allow participants to make use of the US President’s limited Jones Act waiver, which facilitates faster oil shipments to market.
The DoE said it will continue monitoring market conditions and facility operations while taking steps to fulfil the US’ commitments under the collective international release arrangement.
