Houston Ship Channel reopens to limited barge traffic after oil spill

|By:, SA News Editor

The Houston Ship Channel has reopened to barge traffic only, three days after a barge collision dumped as many as 170K gallons of heavy oil into the water near Galveston; the barges are only able to move up and down the Channel, but not yet allowed to enter or leave.

Most U.S. capacity to export natural gas liquids is on the Channel, energy consultant EnVantage says; two companies, Enterprise Products Partners (EPD +0.6%) and Targa Resources Partners (NGLS +0.5%), have channel operations that combine to represent 380K bbl/day of export capacity.

The spill illustrates why the U.S. NGL industry needs to spread export capacity to other areas, says the general manager of midstream operations at Phillips 66 (PSX +1.5%), which is investing in an NGL export terminal in Freeport, ~30 miles from where the Channel opens to the Gulf of Mexico.

It isn't the first spill for Kirby (KEX +0.1%), the tank barge operator involved in the collision, according to a report.