U.S. DOE Strategic Petroleum Reserve

Client: U.S. Department of Energy (DOE)
Location: Louisiana and Texas, U.S.

Executive Summary

Fluor Federal Petroleum Operations (FFPO) was selected in 2013 by the U.S. Department of Energy (DOE) to manage and operate the U.S. Strategic Petroleum Reserve (SPR). The contract had a base term of five years with an option to extend the contract term for an additional five years, for a total contract period of 10 years.

In September 2018, the DOE extended FFPO's management and operating contract through March 31, 2024. As a result of this contract extension, Fluor will continue to support the SPR's life extension engineering and construction efforts.

Client's Challenge

Located along the Gulf of Mexico, the SPR is the world's largest supply of emergency crude oil. Established after the 1973-74 oil embargo, the federally owned oil stocks are stored in 63 underground salt caverns in four locations in Louisiana and Texas. SPR has the capacity to store more than 700 million barrels of sour and sweet crude oil and maintains a minimum of 500 million barrels in reserves. This is estimated to be a 90-day supply for the entire U.S. in the event of a disruption in the supply chain.

Decisions to withdraw crude oil from the SPR are made by the Secretary of Energy or the President of the United States, depending on the size of the withdrawal. The SPR has been used under these circumstances only three times, most recently in June 2011 when the president directed a sale of 30 million barrels of crude oil to offset disruptions in supply due to Middle East unrest. In April 2014, the United States government also released five million barrels of sour crude from the emergency stockpile in a test to verify how new pipelines and other infrastructure might affect the government's ability to transport the crude out of the underground caverns.

The SPR management office is located in New Orleans, Louisiana. Each of the SPR's four storage sites is located near a major center of petrochemical refining and processing and contains multiple underground caverns.

  • Bryan Mound, near Freeport, Texas, is the largest SPR site with cavern # 5 owning the distinction of being the world's largest man-made oil storage container.
  • Big Hill, near Winnie, Texas, is the newest SPR storage site with an optimized layout.
  • West Hackberry, near Lake Charles, Louisiana, has caverns that are presently being degassed to verify market oil can be delivered to meet immediate energy demands.
  • Bayou Choctaw, near Baton Rouge, Louisiana, is the smallest SPR site. The facility has often been called upon and has demonstrated success in achieving mission critical crude oil exchanges as a result of oil supply disruptions created by hurricane conditions on oil production in the Gulf of Mexico.

Fluor's Solution

Fluor's scope at the SPR includes operating and maintaining each of the storage sites and all the related equipment, as well as ensuring cavern integrity to maintain operational readiness. The contract award capitalized on the Government Group's deep management and operations experience, as well as Fluor's Energy & Chemicals expertise in the oil and gas industry.

All four SPR sites have achieved and been recognized with OSHA's Voluntary Protection Program Star Status.

Conclusion

The U.S. DOE selected Fluor Federal Petroleum Operations to manage and operate the Strategic Petroleum Reserve based on Fluor's expertise in the oil and gas industry and Fluor's extensive government experience with the agency. Fluor will manage and operate the Strategic Petroleum Reserve through 2024.