Intercontinental Exchange Inc and Magellan Midstream Partners LP said on Wednesday they would auction dock capacity at Magellan's terminals in Galena Park and Seabrook, Texas, for holders of ICE's Permian West Texas Intermediate (WTI) crude futures contracts.
The monthly auction process will allow customers who purchase an ICE Permian WTI crude futures contract, deliverable at Magellan's East Houston terminal (MEH), the option to load crude directly onto a vessel at Galena Park and Seabrook dock facilities for export, the companies said.
The capacity offered will be adequate to fill Panamax and Aframax size vessels, with Suezmax size vessels set to be added in the future.
Earlier this year, rival exchange operator CME Group and midstream company Enterprise Products Partners LP teamed up to conduct electronic auctions for crude exports.
CME launched its WTI Houston crude futures contract, deliverable at Enterprise's Houston system, in November, just after the ICE Permian WTI crude futures contract launched in October.
The race to provide dock space and export capabilities along with Gulf Coast futures comes as U.S. crude exports have surged to a monthly record above 3 million barrels per day (bpd) after the United States lifted a ban in late 2015.
A shale boom has helped make the Unites States the biggest oil producer in the world, ahead of Saudi Arabia and Russia, and putting it on track to consistently being a net exporter of crude and refined fuels.
"We believe this new program will offer our customers the ability to seamlessly enhance their crude oil export capabilities at Houston area facilities," Robb Barnes, Magellan's senior vice president of commercial crude oil said in a statement.
ICE's Permian WTI crude futures contract for September was down about 3.5% and traded at $58.05 a barrel by 9:46 a.m. ET (1346 GMT) on Wednesday, according to the website.
(Reporting by Devika Krishna Kumar in New York Editing by Marguerita Choy)