Wednesday, December 19, 2018
The Port of Corpus Christi and the Carlyle Group (Washington, D.C.) have agreed to develop a crude oil export terminal on Harbor Island. The project is aimed at creating the first onshore location on the U.S. Gulf Coast capable of serving fully laden very large crude carriers (VLCCs). The project seeks to connect growing crude oil production in the U.S. with global markets, while bolstering the port’s position as a crude oil export hub. 
VLCC access at the Port of Corpus Christi is seen opening the global markets for U.S. oil producers, pipelines, their supply chains, and customers. The project could produce up to a $50-billion annual reduction to the national trade deficit, the developers estimate. Importantly, the city of Corpus Christi would benefit from the thousands of direct and indirect jobs, as well as billions in incremental economic activity.
Under the terms of the agreement, the port will work exclusively with Carlyle to gather oil producers, marketers, pipeline operators, and marine terminal operators to ensure a significant portion of the new oil output in
Texas will have a reliable gateway to international markets. As part of the pact, Carlyle has agreed to lead the construction and ongoing operations of the terminal on an exclusive basis. Carlyle also agreed that it would arrange a private funding solution for a dredging project to bring fully laden VLCCs to Harbor Island, thereby creating, at minimum, a 75-foot main channel depth.
“Carlyle appreciates the steadfast, prescient leader- ship provided by the Port of Corpus Christi Authority in advancing this project,” said Ferris Hussein, managing director of Carlyle’s global infrastructure team. “Providing VLCC access at the port is of critical importance to the United States, and we will collaborate with all stakeholders to ensure such service is provided.”
Construction of the terminal requires no capital outlay from local taxpayers. Under the agreement’s terms, the port will realize significant regular rental payments, volume-based tariff income, land grants, and other proceeds that will help it fund other aspects of port operations. The terminal is expected to be operational in late 2020. Carlyle’s equity for the investment will come from its Global Infrastructure Fund.
The Harbor Island terminal would include the construction of at least two docks, as well as crude oil tank storage inland across Redfish Bay on land secured by Carlyle. The project is subject to agreement on definitive documentation between the parties, satisfactory completion of due diligence, and final approval from Carlyle’s investment committee.
“A project of this magnitude further underscores the vital role the Port of Corpus Christi plays in the global energy markets and as an important economic generator for the great state of Texas,” said Sean Strawbridge, CEO of the Port of Corpus Christi. “In partnering with such an experienced and well-established firm as the Carlyle Group, the market should take notice and have a high degree of confidence of this project’s success.”
“Corpus Christi is certainly where the incremental barrels want to go as we have deep water, availability of land for development, and plenty of capacity to absorb the forecasted U.S. energy production growth in oil and gas,” added Charlie Zahn, chairman of the Port of Corpus Christi Commission. “Corpus Christi is open for business.”
(SOURCE: The Weekly Propane Newsletter, December 17, 2018. Photo courtesy of the Port of Corpus Christi)
VLCC access at the Port of Corpus Christi is seen opening the global markets for U.S. oil producers, pipelines, their supply chains, and customers. The project could produce up to a $50-billion annual reduction to the national trade deficit, the developers estimate. Importantly, the city of Corpus Christi would benefit from the thousands of direct and indirect jobs, as well as billions in incremental economic activity.
Under the terms of the agreement, the port will work exclusively with Carlyle to gather oil producers, marketers, pipeline operators, and marine terminal operators to ensure a significant portion of the new oil output in
Texas will have a reliable gateway to international markets. As part of the pact, Carlyle has agreed to lead the construction and ongoing operations of the terminal on an exclusive basis. Carlyle also agreed that it would arrange a private funding solution for a dredging project to bring fully laden VLCCs to Harbor Island, thereby creating, at minimum, a 75-foot main channel depth.
“Carlyle appreciates the steadfast, prescient leader- ship provided by the Port of Corpus Christi Authority in advancing this project,” said Ferris Hussein, managing director of Carlyle’s global infrastructure team. “Providing VLCC access at the port is of critical importance to the United States, and we will collaborate with all stakeholders to ensure such service is provided.”
Construction of the terminal requires no capital outlay from local taxpayers. Under the agreement’s terms, the port will realize significant regular rental payments, volume-based tariff income, land grants, and other proceeds that will help it fund other aspects of port operations. The terminal is expected to be operational in late 2020. Carlyle’s equity for the investment will come from its Global Infrastructure Fund.
The Harbor Island terminal would include the construction of at least two docks, as well as crude oil tank storage inland across Redfish Bay on land secured by Carlyle. The project is subject to agreement on definitive documentation between the parties, satisfactory completion of due diligence, and final approval from Carlyle’s investment committee.
“A project of this magnitude further underscores the vital role the Port of Corpus Christi plays in the global energy markets and as an important economic generator for the great state of Texas,” said Sean Strawbridge, CEO of the Port of Corpus Christi. “In partnering with such an experienced and well-established firm as the Carlyle Group, the market should take notice and have a high degree of confidence of this project’s success.”
“Corpus Christi is certainly where the incremental barrels want to go as we have deep water, availability of land for development, and plenty of capacity to absorb the forecasted U.S. energy production growth in oil and gas,” added Charlie Zahn, chairman of the Port of Corpus Christi Commission. “Corpus Christi is open for business.”
(SOURCE: The Weekly Propane Newsletter, December 17, 2018. Photo courtesy of the Port of Corpus Christi)
