Corpus Christi Ship Channel Expansion Set to Start this Year

Researched by Industrial Info Resources (Sugar Land, Texas)--The Port of Corpus Christi in Texas approved the issuance of up to $217 million in revenue bonds on June 19 to help finance major capital improvements, including a long-sought expansion of the Corpus Christi Ship Channel to allow it to handle growing exports of oil and natural gas. Industrial Info has tracked the $327 million expansion project since 2017.

Part of the port's 10-year capital investment program, the channel will be dredged from its current depth of 45-47 feet to 54 feet to accommodate Suezmax (those ships that can fit through the Suez Canal and carry up to 1 million barrels of oil) and larger vessels, and widened to 530 feet to allow for two-way traffic flows, positioning the port as the deepest draft navigation port in the U.S Gulf, according to the port authority. The expansion is estimated to increase exports of U.S. oil and gas by nearly $40 billion. The port now handles more than 60% of the U.S.' domestic crude oil exports.

Dredging operations are scheduled to start later this year, the port authority said. Completion is expected by late 2021 or early 2022. For more information, see Industrial Info's project report.

Earlier in June, the U.S. Army Corps of Engineers included nearly $23 million for the channel expansion in its fiscal year 2018 work plan, in addition to $13 million that was earmarked earlier this year. The expansion has now received over $138 million in federal and port-contributed funds, according to the port authority.

The Port of Corpus Christi also has commissioned a feasibility study for dredging a part of the channel to 75 feet near Harbor Island to handle Very Large Crude Carriers (VLCCs), which can hold 2 million barrels of oil, according to the Corpus Christi Caller-Times. The port owns 250 acres of land on Harbor Island, which could be developed as a storage terminal site. However, a group has emerged to oppose the potential terminal. The Port Aransas Conservancy's website lists 14 reasons to oppose a tanker terminal on the island, including the risks involved when locating storage tanks in an area prone to storm surges.

Industrial Info is tracking more than $30 billion in project activity in the Corpus Christi area. Industrial Info assesses the likelihood of each project moving forward as planned. One project that is expected to kick off construction this year is a $400 million crude oil loading and unloading terminal in Ingleside, Texas. Buckeye Partners LP (NYSE:BPL) (Houston, Texas), with joint-venture partners Phillips 66 (NYSE:PSX) (Houston, Texas) and Andeavor Corporation (NYSE:ANDV) (San Antonio, Texas), is developing the project on a 212-acre waterfront parcel at the mouth of Corpus Christi Bay. Now in the permitting phase, the project includes two deepwater vessel docks capable of berthing VLCCs. For more information, see Industrial Info's project report.

About $20 billion of the potential project activity in the area is tied to five liquefied natural gas (LNG) plants in various stages of development by Cheniere Energy Incorporated (NYSE:LNG) (Houston, Texas). Cheniere is completing construction on LNG trains 1 and 2, which are planned to be brought online in 2019. See Industrial Info's project reports for Train 1 and Train 2.

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