Posted on March 21, 2019
The Port of Corpus Christi is preparing to ink a lease for a crude oil terminal on Harbor Island that could result in billions of dollars in new revenue.
The port commission will meet Tuesday to decide whether to approve a 50-year lease with Lone Star Ports LLC, a joint venture between The Carlyle Group and Berry Lone Star Ports LLC. The agreement would be for 200 acres of land on Harbor Island near Port Aransas, according to a memo that will be presented to port commissioners.
It would allow for the construction of a marine terminal for loading and unloading petroleum and petroleum products, a petroleum storage facility and two new docks, according to port documents, according to the memo.
Under the terms of the lease agreement, the port will design and construct the two docks, while Lone Star will build the storage infrastructure and pipelines connecting the terminal to its long-term storage facility on the Intracoastal Waterway, the memo states.
Port officials have said the terminal project and work to expand the Corpus Christi Ship Channel is key to accommodate the increasing flow of crude oil and natural gas from the Eagle Ford Shale and Permian Basin. Port officials had announced back in October that it was considering a marine terminal with The Carlyle Group on Harbor Island, but that was subject to approval by the company’s board of directors.
The proposed agreement being considered on Tuesday is not just with The Carlyle Group, but with its partner and, as a result, the new venture between the two companies. It is still subject to approval by the Lone Star Board of Directors, the memo states.
“It is estimated that U.S. crude export volumes will grow from their 3.6 million barrels per day today to 8 million barrels per day by 2023,” the memo states. “The demand centers require a Very Large Crude Carrier capability and Lone Star docks … will have such capability.”
VLCCs are capable of carrying up to 2 million barrels of crude oil, and the port has proposed dredging part of the ship channel to 75 feet up to Harbor Island to accommodate the full loading of those vessels. A separate dredging project is set to begin to deepen the channel to 54 feet in some areas, as well as widen it to allow for two-way traffic.
The proposed 50-year lease with Lone Star could result in $2 billion to $4 billion in new revenue for the Port of Corpus Christi over the life of the lease, the memo states.
The Harbor Island project has drawn heavy opposition from residents in Port Aransas, who have said dredging will have a negative impact on the marine life that is key to the city’s tourism industry. There is also concern from Port Aransas residents about the affects that could come from the massive VLCCs moving in and out of the area.
Port commissioner Wes Hoskins also has an item on Tuesday’s agenda to propose a cruise ship terminal on Harbor Island that seems to be an alternative to the crude oil terminal being considered.
This is a developing story. Check back to Caller.com for updates.
Source: caller.com
