The US has scrapped a pollution control licence for a new VLCC terminal being developed by refiner Phillips 66 and trader Trafigura.

The Environmental Protection Agency (EPA) revoked the permit following objections from green groups.

The Bluewater Texas Terminal project applied for a Clean Air Act licence in 2019.

In November 2020, it received a permit that allowed the terminal to emit almost 19,000 tonnes of pollutants per year.

Environmental groups had asked the EPA to amend the permit so that Bluewater would have to reduce this amount by at least 95%.

The terminal, on the US Gulf coast near Corpus Christi, has now been directed to withdraw its application by 15 September and submit a new proposal that meets “pollution control norms”, the EPA said in a letter seen by Reuters.

These norms would cut pollution by 18,000 tonnes per year, according to lawyer Gabriel Clark-Leach of the Environmental Integrity Project, which campaigned against the permit.

Green groups had argued that pollution from the offshore terminal posed risks to minority and lower-income communities.

Phillips 66 said on behalf of both partners that it is reviewing the EPA’s letter.

The terminal is seen by brokers as one of the keys to boosting US crude exports and increasing tanker tonne-miles.

Bluewater can potentially ship out up to 384m barrels of oil per year on large tankers — more than a suezmax cargo per day.

French broker Barry Rogliano Salles has said owners could run up against a lack of US export capacity for VLCCs by 2024 as crude shipments continue to rise.

It forecasts shipments could increase to between 4m and 4.5m barrels per day by the end of this year.

The LOOP terminal in the US Gulf continues to be the only facility capable of fully loading a VLCC, and this is unlikely to change next year.

Most VLCC-capable terminals remain in the planning stage after being delayed by the pandemic.

Bluewater is well advanced, as is Enterprise Products Partners’ Sea Port Oil Terminal off Houston, Texas.

But BRS does not expect either project to be commissioned until at least late 2024.

As dredging work continues, Moda Midstream’s Ingleside terminal should be capable of almost fully loading a VLCC by the end of 2023. It can currently part-load a VLCC.