Japanese Investors Back U.S. Offshore Oil Terminal in Deal With White House
Japanese investors has agreed to back a large-scale offshore loading terminal off the coast of Texas, the newly-permitted Texas GulfLink project. The agreement is one of Japan's first efforts to satisfy a record-setting investment commitment that it made to the White House in exchange for reduced U.S. tariffs on Japanese cars and other goods.
Texas GulfLink is a single point mooring project planned for the coast of Brazoria County, Texas. Once completed, it will be the second offshore loading terminal in the United States (after the Louisiana Offshore Oil Port). It is backed by Sentinel Midstream.
The two GulfLink buoys will be fed from a 42" subsea pipeline connected to a manned offshore platform, where its operations will be overseen on-site in real time. The site has enough water depth to accommodate VLCCs, which are more economical to use in international trade. According to the U.S. Department of Transportation, the project will support more than 700 jobs and increase oil export capacity by as much as one million barrels per day.
The project is one of three Japanese investments announced by the White House on Monday. Others include a diamond-grit plant in Georgia - an important high-tech manufacturing consumable - and the Portsmouth Powered Land Project in southern Ohio, which will add nine gigawatts of gas-fired power generating capacity to the grid. The mega-station will be big enough to power half the state - at a construction cost of $33 billion. Japan's SoftBank is providing the funds, and its SB Energy subsidiary is going to be the operator. When fully built out, it will be the largest gas-fired power plant in the world.
According to Japanese Prime Minister Sanae Takaichi, the projects will have a meaningful made-in-Japan element: they are "expected to bring increased sales and business expansion for Japanese companies through the supply of related equipment."
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The investment announcement contains the first tranche of agreements that Japan has made under a new U.S. trade policy framework. During tariff negotiations with Japan last year, Commerce Secretary Howard Lutnick proposed creating a multibillion-dollar Japanese investment package that would be directed by President Donald Trump. In exchange for the pledge and a loosening of Japan's limits on American imports, the U.S. would lower its tariffs on Japanese goods and cars. The final public figure for the fund came to $550 billion; the administration claimed that the U.S. government would retain 90 percent of the profits from the investments. If actualized, it would be the largest foreign investment in world history.
The list of priority target industries for focused Japanese investment included LNG, grid modernization, semiconductors, critical minerals production, pharmaceuticals, and commercial and defense shipbuilding. Two of the three investments announced Monday align with these initial priorities.
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