Sable Offshore Corp. (NYSE: SOC) has announced its alternative offtake strategy as it seeks approval to restart its onshore pipeline in California. The company has satisfied all operational conditions to resume petroleum transportation through the onshore pipeline, as outlined in the federal consent decree. The updated investor presentation reveals that Sable is pursuing an offshore storage and treating vessel (OS&T) strategy to provide access to domestic and global markets via shuttle tankers for federal crude oil produced from the Santa Ynez Unit (SYU) in the Pacific Outer Continental Shelf area.
In the period from 1981 to 1994, the SYU produced over 160 million barrels of oil equivalent using the leased OS&T strategy. Sable states that continued delays related to the onshore pipeline will prompt the company to fully pivot back to the leased OS&T strategy if necessary. The onshore pipeline is expected to provide immediate economic relief to California residents and play a significant role in stabilizing local refineries. In contrast, the OS&T strategy would offer the company the freedom to market its production outside of California.
Sable anticipates executing an OS&T lease contract by the end of 2025 for delivery in Q3 2026. Sales from all SYU platforms are expected to commence in Q4 2026, with comprehensive oil production rates projected to exceed 50,000 barrels of oil per day using the OS&T within the SYU federal leases.
Sable Offshore Corp. is an independent oil and gas company headquartered in Houston, Texas, with a focus on responsibly developing the Santa Ynez Unit in federal waters offshore California. The company emphasizes its extensive experience in safely operating in California. The market has reacted to these announcements by moving the company's shares -8.2% to a price of $18.13. For more information, read the company's full 8-K submission here.
