The Matrix LOOP Auction
The Louisiana Offshore Oil Port (LOOP) is a deepwater port in the Gulf of Mexico off the coast of Louisiana near the town of Port Fourchon. LOOP provides tanker offloading and storage services for crude oil transported on some of the largest tankers in the world. LOOP’s onshore facilities, Fourchon Booster Station and Clovelly Dome Storage Terminal, are located on-shore in Fourchon, and 25 miles inland near Galliano, Louisiana.
The Clovelly Dome Storage Terminal is used to store crude oil in underground salt domes before it is shipped to various refineries. The terminal consists of eight caverns with a total capacity of 50 million barrels. LOOP also operates a large, modern tank facility at Clovelly, Louisiana. Each tank holds up to 600,000 barrels of crude oil. Fifteen tanks are currently in service. Current construction will expand the tank facility to approximately 10 million barrels of crude oil storage.
In March 2015, together with the CME Group and Matrix Markets, LOOP launched the world’s first crude oil storage futures contract. LOOP Crude Oil Storage futures (CME: LPS) help customers manage their physical crude storage price risk, while enhancing price transparency of, and access to, short-term (monthly) storage capacity along the U.S. Gulf Coast. The contract is an important tool to help manage delivery of crude oil in the U.S. Gulf Coast market at LOOP’s Clovelly Hub. The contract also enhances liquidity of the existing LOOP Gulf Coast Sour Crude Oil Futures (CME: MB) contract, which is physically deliverable at LOOP.
At 11 a.m. CST on the first Tuesday of every month, Matrix hosts an on-line auction of storage futures contracts (“SFCs”) and physical forward contracts (“PFAs”) on behalf of LOOP.