Posted on March 29, 2018
By Ashok Dutta with Sarah Raslan, Platts
The US Army Corps of Engineers is due to complete the dredging of a six-to-eight mile section of the Houston Ship Channel in May to increase the draft and facilitate more tanker traffic, Bill Diehl, president of the Greater Houston Port Bureau, said Monday.
“We still have some shoaling spots as an aftermath of Hurricane Harvey that has reduced water draft at some places to 41 feet,” Diehl said. “This continues to impact vessel movement and will impact oil exports.”
The shoaling spots are located in the Turning Basin and west of the 610 Bridge along the channel, which is home to crude storage and export facilities owned by Magellan Midstream Partners, NuStar Energy and Targa Resources, said Mike Cunningham, the bureau’s director of program management.
None of those three companies were available Monday for comment on what extent the reduced draft has impacted their crude loadings.
A shipping market source who regularly loads Suezmax tankers in the Houston Ship Channel said business has not been impacted by the reduced draft restrictions in place since Harvey.
“We regularly load Suezmaxes in Houston, but need to top off with a lightering,” he said.
The shipping source said 800,000- 850,000 barrels can be loaded on a vessel in the channel. But with the need for lightering operations to fully load a Suezmax tanker up to 1 million barrels, players usually directly load 500,000 barrels at the terminal and lighter the balance.
The 52-mile Houston Ship Channel originates at the Turning Basin and ends in Galveston, and has depths ranging from 36 feet to 45 feet.
The bulk of the Houston Ship Channel’s crude is loaded onto Aframax tankers with a capacity of 750,000 barrels, while some 1-million barrel Suezmax tankers are partially loaded to around 800,000 barrels at a maximum depth of 45 feet, Diehl said.
The Greater Houston Port Bureau is a member agency that coordinates the movement of all vessels in the Houston-Galveston marine complex, which includes Port Houston, Port of Texas City, Port of Galveston and the Port of Freeport.
‘ADVANCED’ DREDGING
The number of deepwater vessels arriving at the four ports in February totaled 823, down from 904 in January, according to data provided by the bureau.
Deihl did not say if the decrease in traffic was due to the shoaling, but said the bureau is now “lobbying” for the channel to be dredged to 47 feet instead of the 45 feet to deal with the aftermath of any hurricanes or tropical storms in the future.
“We want the [Corps] to do advanced dredging [to 47 feet] that will give us a cushion and give the port a resiliency to bounce back,” Diehl said.
Runoff and silting of rivers flowing into Galveston Bay and the bayous out of Houston resulted in major shoaling in the channel and delays in fully opening up the waterway to tanker traffic post-Hurricane Harvey, he said.
“Theoretically, an Aframax or Suezmax can still be loaded at a reduced draft of 41 feet. But the [Corps] carries out hydrographic surveys and imposes restrictions on tanker traffic,” Cunningham said.
The Corps was not available for comment Monday.
Diehl did not indicate what the capital cost would be for “advanced” dredging, but said there are “Harvey funds” available from federal agencies and the state of Texas.
The greater Houston area, which includes facilities from Galveston through the Houston Ship Channel and Freeport, has the capacity to export at least 900,000 b/d of crude, according to S&P Global Platts Analytics.
Source: Platts
