An energy services company and liquified gas carrier have agreed to jointly develop an ethylene marine export terminal at the Port of Houston, while the Port of Gulfport in Mississippi will become home to a compressed gas liquids (CGL) production plant.
Two U.S. Gulf Coast ports have secured new business in the booming energy export sector.
At the Port of Houston, an agreement has been struck in principle to bring a new gas export terminal to the Houston Ship Channel, the conduit for ocean-going vessels between Houston-area port terminals and the Gulf of Mexico.
Energy services company Enterprise Products Partners LP and liquified gas carrier operator Navigator Holdings Ltd. on July 12 executed a letter of intent to jointly develop an ethylene marine export terminal on the channel. Ethylene is a colorless, odorless flammable gas used in the chemical industry and is also a natural plant hormone that can be used in agriculture to force the ripening of fruit.
Enterprise says it would manage the construction, operations and commercial activities of the proposed terminal. The facility would be located at the company’s Morgan’s Point complex, which has a 45-foot draft and includes Enterprise’s ethane marine export terminal, which is among the world’s largest.
Navigator subsidiary Navigator Gas brings with it extensive experience with ethylene shipping and a fleet of 14 ethylene-capable vessels, Enterprise said.
The ethylene export terminal would be connected to Enterprise’s under-construction high-capacity ethylene salt dome storage and ethylene pipeline system. Enterprise says its ethylene storage facility would have about 600 million pounds of capacity with an injection/withdrawal rate of 210,000 pounds per hour, expandable to 420,000 pounds per hour. The pipeline system would be connected to multiple producers and consumers of ethylene on the U.S. Gulf Coast.
Based on data available from currently announced projects, the U.S. petrochemical industry is believed to be expanding its ethylene production capacity by 45 percent between 2016 and 2020, driven by plentiful low-cost supplies of American natural gas and ethane.
Almost 90 percent of the expansions are at facilities located along the Texas and Louisiana Gulf Coast. Enterprise says that its ethylene storage and pipeline system, together with the proposed ethylene export terminal, would provide the petrochemical industry with logistical flexibility and an outlet to international markets.
“Customers would have the ability to manage the transportation and storage of ethylene supplies from the tailgate of producing facilities to domestic and international consuming derivative plants,” Enterprise Chief Executive Officer of the General Partner Jim Teague explained. “The proposed ethylene export terminal would provide U.S. petrochemical companies critical market diversification, rather than relying solely on polyethylene export markets.”
Meanwhile, just 400 miles to the east, the Port of Gulfport in Mississippi is set to become the home of a new compressed gas liquids (CGL) production plant.
“Gulfport is the only port in the United States authorized to ship this form of gas,” said port director Jonathan Daniels, according to local television station WLOX.
The Mississippi State Port Authority at Gulfport approved a 40-year lease agreement back in April with SeaOne Gulfport LLC, which will develop the CGL production plant, the port authority said in a statement.
The CGL exports will be shipped primarily to the Caribbean and Central American markets.
“While the U.S. benefits from low-cost natural gas, many Caribbean and Central American countries struggle to meet their energy needs,” SeaOne said. “Countries in this region rely on high cost liquid fuels which limits economic growth and negatively impacts the socio-economic fabric of the region.”
SeaOne plans to begin construction in early 2018, and expects the plant to be operational in April 2020.
SeaOne Gulfport LLC is a wholly-owned subsidiary of Houston-based SeaOne Holdings, which confirmed its plans to commence development on this project back in September 2012.
“The port’s strategic location allows direct access to target export markets, proximity and connectivity to existing natural gas infrastructure while offering available land for growth, thereby positioning the Port of Gulfport as SeaOne’s preferred location,” SeaOne said of the project.
The initial plant is expected to be capable of shipping 6 million to 8 million tons of cargo annually, the port authority said.
“There will be two large-scale pipelines from just north of I-10 underground, and ultimately attached to a facility on the port site,” Daniels said.
The project represents a private investment of $450 million, and no public funding will be used to finance the effort, according to WLOX.
However, SeaOne explained that the phase 1 capital expense is estimated at $450 million, but at phase 4, it’s an estimated $1.6 billion investment.
The Port of Gulfport handles a variety of cargo – such as container, bulk and break-bulk – and is served by Class I railway Kansas City Southern, according to the port’s website. The port’s navigational channel is approximately 300 feet wide north and 400 feet wide south of the barrier islands, and is federally mandated to a depth of 36 feet. The port’s North Harbor is 32 feet deep, and its South Harbor, which contains the turning basin, is 36 feet deep.
U.S. Gulf ports to benefit from booming new energy sector
