POCC Commission approves 50-year lease with Carlyle Group, Berry Group JV

Crude oil exports are one of the key growth engines that the Port of Corpus Christi is flexing its significant muscle to build up.

Corpus Christi Harbor Island Terminal Complex Targets Deepest Channel Depth of any Onshore Crude Oil Export Facility in the U.S. - Oil & Gas 360

Port of Corpus Christi

This expansion of export capacity is perfectly timed to allow Permian Basin and Eagle Ford producers to move the area’s light crude oil to offshore customers. Corpus Christi is already the 4th largest U.S. port in total tonnage, with a 36-mile, 47 foot (MLLW) deep ship channel. But the channel is about to get deeper, now that the POCC has initiated a lease with the Carlyle group and Berry Group to create a facility that can fully load Suezmax category of tankers in port.

Lone Star Ports’ facility on Harbor Island is designed to be the deepest-draft safe harbor crude export facility in the nation when commissioned.

Immediately upon completion, the facility’s two docks will have access to the improved 56’ ship channel depth, making it the United States’ first and only onshore terminal capable of fully loading Suezmax vessels and nearly full loading Very Large Crude Carriers (VLCCs).

Last month, the U.S. Army Corps of Engineers (USACE) awarded the first dredging contract for the Corpus Christi Ship Channel Improvement Project to the largest U.S. dredging company, Great Lakes Dredge and Dock Company (GLDD), to deepen the channel to a depth of 56’ from the Channel entrance to Harbor Island, and a planned depth of 54’ throughout the rest of the harbor.

50-year lease for Harbor Island crude export base

On March 28 the Port of Corpus Christi Commission approved a long-term (50-year) lease agreement with Lone Star Ports, LLC, a joint venture between the Carlyle Group and the Berry Group, for approximately 200 acres on Harbor Island to develop a state-of-the-art petroleum export terminal that will connect U.S. crude producers with all major international markets.

Civil works for this facility repurposing project have been underway for the past year ahead of finalizing a definitive lease agreement, including the demolition of existing dock structures from a previous decades-old Exxon crude import terminal on Harbor Island. The execution of this new lease enables the parties to commence major equipment and materials procurements and other construction efforts.

Corpus Christi Harbor Island Terminal Complex Targets Deepest Channel Depth of any Onshore Crude Oil Export Facility in the U.S.

Tanker classes: when completed the Harbor Island crude oil export terminal at the Port of Corpus Christi will be able to fully load a Suez-Max tanker, and partially load VLCC supertankers.

The lease agreement between the Port of Corpus Christi Authority and Lone Star Ports will provide significant accretive value in the Port’s annual operating revenues, and the project is expected to create more high-wage jobs and more economic prosperity for Port Aransas, Nueces County, and throughout Texas, the POCC said in a press release.

“This long-term commitment is testament to the significance of the Corpus Christi gateway for American energy exports, which are expected to triple in the next decade,” said Sean Strawbridge, Chief Executive Officer for the Port of Corpus Christi. “A 50-year lease agreement with the Carlyle Group and the Berry Group joint-venture company, Lone Star Ports, is not only complementary to our existing marine terminal infrastructure but also positions the Port of Corpus Christi to be the preferred outlet for US-produced crude exports serving all major global demand centers for generations to come.”

“The Carlyle Group is enthusiastic about our shared vision with the Port of Corpus Christi Commission to develop an environmentally safe, world-class facility that will position Corpus Christi as a vital economic engine in Texas and around the globe,” said Ferris Hussein, Managing Director of The Carlyle Group. “The Harbor Island project would not be possible without the leadership shown by the Port’s commission and staff in their ongoing commitment to communities throughout the Coastal Bend region. This partnership is a great vote of confidence in Carlyle and our abilities to deliver generation changing infrastructure projects, and we take that responsibility seriously.”

POCC ship channel improvements are in the president’s budget

For the second year, the Port of Corpus Christi’s Ship Channel Improvement Project (CIP) was included in the president’s budget for U.S. Army Corps of Engineers (USACE) Coastal Navigation Construction that was released last month by the White House. The Port of Corpus Christi is the only Texas port included in the president’s proposed budget.

The proposed budget includes $53,313,000 in funding for the Port of Corpus Christi’s CIP in the USACE Civil Works budget. The CIP received $13 million in the 2019 federal budget, $23 million in the 2019 USACE Work Plan, and $59 million in the USACE 2020 Work Plan, in addition to the $132 million the Port of Corpus Christi has contributed to the CIP project, the POCC said in a press release.

Completion of the ship channel will allow the Corpus Christi to increase export volumes of U.S. oil and natural gas. The Port of Corpus Christi reported that it exported $10.8 billion of crude oil to U.S. trading partners in 2018.

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