Deeper And Deeper – Corpus Christi Channel Dredging by Great Lakes Dredge & Dock and Callan Marine

Figure 1. Gulf Coast Crude Oil Export Volumes.

A significant factor in Corpus’s success — in addition to the new pipelines from the Permian — has been the ability of two state-of-the-art marine terminals in Ingleside to dock 1,100-feet-long VLCCs at their facilities and partially load them there. VLCCs are the transporters of choice for many shippers moving crude oil to Asia and Europe because of the lower per-barrel cost, and loading up to 1.2 MMbbl into VLCCs at EIEC and South Texas Gateway (STG) provides additional savings by slashing the cost of reverse lightering by two-thirds. (Reverse lightering involves shuttling smaller tankers such as Aframaxes out to empty or partially loaded VLCCs anchored in specified deepwater locations in the Gulf of Mexico — see Berth in Reverse for more.)

Giving Corpus-area terminals the wherewithal to load a lot more crude oil into tankers — VLCCs and, as we’ll get to, Suezmaxes and Aframaxes too — was a primary driver behind the Corpus Christi Channel Improvement Project (the job’s formal name). As we said a couple of years ago in Low Rider, all nine of the Corpus/Ingleside terminals capable of exporting crude oil are sited along the Corpus Christi Ship Channel system (blue line in Figure 2) — six of them along the Inner Harbor end of the 29-mile-long main ship channel (gray terminal icons) and the three Ingleside terminals near the ship channel’s La Quinta Junction (dashed purple oval). For more than 30 years, the entire system has been maintained at a depth 47 feet below what is officially called “Mean Lower Low Water” (MLLW). For our purposes, MLLW is best described as the average minimal tidal depth likely to be encountered by maritime operators.

Figure 2. Corpus Christi Ship Channel System.

For the half-dozen terminals along the Inner Harbor, that channel depth — combined with width constraints — has limited the vessels that can load at their docks to Suezmaxes, Aframaxes, and smaller tankers. As for the terminals in Ingleside, all three (including Flint Hills Ingleside) can handle Suezmaxes and two — EIEC (red terminal icon) and STG (green terminal icon) — also can load up to 1.2 MMbbl into VLCCs. (Gibson Energy announced June 14 that it has reached an agreement to acquire STG from co-owners Buckeye Partners, Phillips 66 and Marathon Petroleum for $1.1 billion. The deal is expected to close in Q3 2023.)

The channel improvement project involves deepening the ship channel system to at least 54 feet below MLLW. As we said earlier, the project is split into a total of four contracts (white numbers/green circles and green vertical lines in Figure 2), the first of which is finished and the second and third of which are now nearing completion:

• Contract 1, which involved deepening the ship channel to 56 feet below MLLW from the near-shore Gulf of Mexico to the end of the jetties at Port Aransas and to 54 feet below MLLW from the jetties to Harbor Island (#1 section in Figure 1), was awarded by the U.S. Army Corps of Engineers to Great Lakes Dredge & Dock Co. in December 2018 and completed by the company in February 2020.
• Contract 2 — for the stretch from Harbor Island to just west of La Quinta Junction, a portion that includes the three Ingleside terminals (#2 section) — is being performed by Callan Marine. In addition to deepening that part of the ship channel to 54 feet below MLLW, Callan is widening it to 530 feet, with an additional 200 feet of “barge shelves” on either side of the main channel. In essence, the smaller-depth barge shelves will make these parts of the ship channel system into four-lane thoroughfares, allowing the passage of VLCCs and Suezmaxes in the two deeper central lanes, while lower-draft barges are moved along the two shallower outside lanes (see Figure 3).
• Contract 3, which like Contract 1 was awarded to Great Lakes Dredge & Dock, involves the main channel from just west of La Quinta Junction to about halfway through the Inner Harbor (#3 section). That section is being deepened to 54 feet below MLLW and widened to 530 feet (from the old 400 feet), and barge shelves are again being added to both sides of the main channel.

At xPortCon, the POCC’s Garcia said the dredging contractors on both Contract 2 and Contract 3 are expected to finish their work within the next 60 to 90 days. Enbridge’s Anderson said the deeper channel to Ingleside will enable EIEC to load up to 1.6 MMbbl into VLCCs and to fully load 1-MMbbl Suezmax-class tankers, whose loading at the Enbridge terminal had previously been limited to 800-850 Mbbl because of — what else? — the channel’s old 47-foot depth. (Anderson also said that EIEC, which already has a staggering 15 MMbbl of crude oil storage, is in the process of building 2 MMbbl more that will be available later this summer.)

Next up is Contract 4, which will deepen the innermost portion of Corpus Christi’s Inner Harbor (all the way to the Viola Turning Basin — #4 section in Figure 1) to 54 feet below MLLW and thereby conclude the overall project. The Corps of Engineers plans to solicit bids for Contract 4 by the end of June and (it is hoped) award the contract by the end of August. (Callan Marine and Great Lakes Dredge & Dock, both of which are wrapping up very similar work nearby on Contract 2 and Contract 3, respectively, would appear to be likely bidders.) Contract 4 is scheduled to be completed by the end of 2024.

EPIC’s Freed, whose firm owns the EPIC Marine Terminal on the south side of the Inner Harbor, said at xPortCon that when the dredging work is finished the terminal — now focused on loading Aframax-class tankers — will be able to load an Aframax to 760 Mbbl, or about 40 Mbbl more than it can now due to the channel’s 47-foot depth. He noted that EPIC, already the Corpus area’s third-largest crude oil exporter by volume after EIEC and STG, has permits in hand for a possible Suezmax-capable dock but is unlikely to develop that until additional pipeline capacity from the Permian to the Corpus area is available — more on that in a moment. (By the way, don’t dismiss Aframaxes. Not only are they used extensively for reverse lightering and to deliver crude to ports too small to handle VLCCs or Suezmaxes, they also are the only ships that can be used to supply WTI Midland barrels to the Dated Brent benchmark — a topic we’ll discuss in an upcoming blog.)

A couple more things are worth noting. One is that, even with the channel-deepening work being done, VLCCs still will not be able to access the Inner Harbor — there’s simply not enough room there for the mammoth supertankers to turn around. Another is that the old Harbor Bridge over the ship channel (yellow bridge icon in Figure 1) provides barely enough vertical clearance to allow an empty Suezmax to sail beneath it — 138 feet of vertical clearance to be exact. In fact, we’ve heard that inbound Suezmaxes need to do the marine equivalent of The Limbo when they pass under the bridge, maneuvering the water ballast within the tanker’s hull, first to lower the front (or bow) of the vessel and then to lower the back (or stern) — quite a feat, considering that they’re dealing with a tanker three times the length of a football field! A new Harbor Bridge, now under construction and scheduled for completion in 2025, will offer 205 feet of vertical clearance.

Lastly — and this is a biggie — further growth in Corpus-area crude oil export volumes will require more than a deeper ship channel. As we said in Sooner or Later, the pipelines from the Permian to Corpus/Ingleside have been running full or close to full and more capacity will need to be added soon or shippers may have no choice but to divert at least some of their Permian volumes to Houston-bound pipelines. Enbridge’s Anderson, whose company holds a 68% ownership interest in Gray Oak and operates the pipeline (and owns a 30% stake in Cactus II), said at xPortCon that a 200-Mb/d expansion of Gray Oak is in the works and will be brought to the market later this year, and EPIC’s Freed said an expansion of at least 300 Mb/d of its EPIC Crude Pipeline is the most cost-effective and is likely to happen “in the not-too-distant future.”

We end with a genuine thank you to all of the industry leaders and other experts who spoke at xPortCon and to the hundreds more who attended. It’s safe to say that everyone who took part — or who are now watching the xPortCon videos at their leisure — learned a lot, us included.

“Deeper and Deeper” was written by Madonna, Shep Pettibone and Anthony Shimkin and appears as the fourth song on Madonna’s fifth studio album, Erotica. Released as a single in November 1992, it went to #1 on the Billboard Dance Club Songs chart, #2 on the Billboard Mainstream Rock chart and #7 on the Billboard Hot 100 Singles chart. A dance-pop and deep house-flavored song with lyrics about sexual and romantic desire, the groove of the tune also gives a nod to 1970s’ disco and Philadelphia soul. The Bobby Woods-directed video got heavy saturation on MTV. Personnel on the record were: Madonna (lead vocals), Shep Pettibone (keyboards, programming, sequencing), Anthony Shimkin (keyboards, programming, sequencing), Joe Moskowitz (keyboards), Paul Pesco (guitar), and Donna DeLory and Niki Haris (background vocals).

Erotica was recorded in 1991-92 at Clinton Recording, Mastermix and Soundworks in New York City with production by Madonna, Shep Pettibone and Andre Betts. Released in October 1992, it went to #1 on the Billboard Dance Albums chart and #2 on the Billboard 200 Albums chart. It has been certified 2x Platinum by the Recording Industry Association of America (RIAA). The album was released at the same time that Madonna’s first book publication, Sex, was released. Both the LP and the book were the first releases from Maverick, Madonna’s new multimedia entertainment company. Six singles were released from the album.

Madonna (Madonna Louise Ciccone) is an American singer, songwriter and actress. She rose to stardom after the release of her first album, Madonna, in 1983. She has released 14 studio albums, six live albums, seven compilation albums, three soundtrack albums and 94 singles. Madonna has sold over 300 million records worldwide and has the most RIAA-certified multi-platinum albums by a female artist. She has starred in 17 motion pictures. She has won two American Music Awards, two Brit Awards, six Golden Globe Awards, seven Grammy Awards, nine Ivor Novello Awards, and 20 MTV Video Music Awards. Madonna is a member of the Rock and Roll Hall of Fame, Songwriters Hall of Fame and UK Music Hall of Fame. She continues to record, act, and tour, and will embark on her Celebration Tour, celebrating four decades of music, beginning in July 2023.

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