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Race on for local VLCC terminal, but does there need to be?

Posted at 4:23 PM, May 28, 2019
and last updated 2019-05-28 19:12:26-04


The Port of Corpus Christi is already one of the country’s main oil export hubs, but they’re facing competition from Dutch company Trafigura.

Both want to build a supertanker facility in the Coastal Bend; so, the race is on, but is it winner take all?

VLCC terminals are coming to the Coastal Bend, there’s no question about that.

“We have the capacity, and that is important,” said Dr. Jim Lee, economics professor at Texas A&M-Corpus Christi.  “In Houston, it is too congested.”

The Port wants to build its VLCC terminal on Harbor Island across from Port Aransas and lease the terminal to the Carlyle Group.

In order to handle tankers capable of carrying 2,000,000 barrels of oil, the Port plans to dredge the ship channel to 75 feet.  While Port officials don’t believe a U.S. Army Corps of Engineers request for an Environmental Impact Statement on the dredging project delays their VLCC terminal, there is a sense of urgency.

“Private industry is going to go to the path of least resistance, and if it takes too long for coastal navigation constructions projects to be executed on, they’re going to find alternatives,” said Sean Strawbridge, Port of Corpus Christi CEO.

The alternative is offshore, where Trafigura wants to build in Kleberg County waters.  Some experts believe Trafigura’s project could be green-lit first, so is there enough business to go around?

“The Trafigura project would actually take no more than 10% of the expected growth,” said Lee.

That’s good news for Port officials who see the Coastal Bend becoming the nation’s energy export hub.

“All the forecasts that we see are that there’s going to be significant continued growth,” said Strawbridge.  “We have to have multiple outlets to be able to handle the increased anticipated volumes.”

There was another firm considering a VLCC terminal on Harbor Island, but the Port’s agreement to work exclusively with the Carlyle Group makes another terminal there unlikely.

According to industry experts, the benefit of having the first local VLCC facility to open is that its owner has a head start on setting up long-term export agreements with Texas oil producers.