Texas Port Expansion Seeks to Provide Oil Tankers an Alternative to More Crowded Ports

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Researched by Industrial Info Resources (Sugar Land, Texas)--Developers of a port expansion on the Texas Gulf Coast between Houston and Corpus Christi say they want to provide a less-crowded alternative to oil tankers seeking to load Permian and Eagle Ford basin crudes.

Expansion of the Port of Calhoun, located on Lavaca Bay, will begin this year now that the U.S. Water Resources Development Act of 2020 has been passed, Max Midstream LLC (Houston, Texas) and the Calhoun Port Authority said in a statement released on Monday. The act, which authorizes the deepening and widening of the port, was folded into the massive U.S. omnibus spending package and COVID-19 relief bill that was signed into law on December 27.

According to its website, Max Midstream "provides a critical bridge between the Texas upstream sectors in the Permian Basin and Eagle Ford with a new global alternative export facility at the Port of Calhoun," adding that it provides "a less congested, dedicated path to the U.S. Gulf Coast to serve both domestic and international markets."

Max Midstream and the Calhoun Port Authority agreed on a public/private partnership in 2020 in which Max Midstream would invest $360 million to finance the deepening and widening of the port by 2023 to accommodate bigger vessels. The project will enable Aframax and Suezmax ships to load directly at the port and allow up to 20 million barrels per month to be shipped out. The port is served by the Matagorda Ship Channel and the Gulf Intracoastal Waterway.

Meanwhile, Max Midstream said it has secured a lightering zone to perform reverse lightering to load crude onto larger ships until the port project is completed. Industrial Info is tracking a three-phase port expansion by the Calhoun Port Authority. Click here for the projects.

Max Midstream also said it reached an agreement with Phillips 66 (NYSE:PSX) (Houston) to connect the Gray Oak pipeline to the Calhoun Port.

In September, Max Midstream said it had acquired the Seahawk pipeline and terminal from Oaktree Capital at the Port of Calhoun, with plans for a pipeline connecting the port to both the Eagle Ford and Permian basins to transport up to 20 million barrels a month of oil to an expanded and "revitalized" terminal. The expansion includes construction of four 100,000-barrel crude oil storage tanks and two 25,000-barrel tanks to increase the facility's storage capacity to 600,000 barrels. Commissioning of the expansion project was underway. For more information, see Industrial Info's project report.

The company also plans a second-phase expansion at the Seahawk facility, with completion in 2023; see project report.

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