Feature Illustration (above): Max Midstream plans to expand the crude oil tank farm at the Port of Calhoun. All images courtesy of Max Midstream.
Posted: 10-9-2020
by Adolfo Pesquera
Point Comfort (Calhoun County) — Max Midstream recently announced a public-private partnership with the Calhoun Port Authority in which Max Midstream will invest $360 million to finance the deepening and widening of the Port of Calhoun by 2023.
That investment is needed by Max Midstream to maximize its utilization of the Seahawk Pipeline and Terminal from Oaktree Capital at the Port of Calhoun.
Max Midstream announced that acquisition Sept. 23. The port, located south of Point Comfort, is a part of the Victoria Metropolitan Statistical Area.
Todd Edwards, president of the company, cited a study that estimated their project will create 474 direct new jobs and another 598 construction related jobs over the next ten years.
The project includes the construction of new pipeline that will connect the port to crude oil coming from the Eagle Ford Shale and Permian Basin. Up to 20 million/month barrels will eventually flow to the expanded port and the total project represents a $1 billion investment by Max Midstream.
As was reported Oct. 6 in the Victoria Advocate, Calhoun Port Director Charles Hausmann said, “This will transform our port into a major oil exporting center, and it will transform our area with new jobs and new growth.”
Max Midstream explained that its interest in this venture was due to congestion at the ports of Houston and Corpus Christi, both of which are typically at or near capacity. The company intends to market the Port of Calhoun to the global energy industry as a viable third option for Texas oil exports.
“By developing the Seahawk Terminal at the Port, we will be able to offer a deep-water terminal with little congestion and the ability for producers to get their product to the port at a very reasonable price,” Edwards said.
The newly acquired pipeline connects the Kinder Morgan Crude and Condensate Interconnect in Edna–where Max Midstream also operates a crude oil terminal–to the Seahawk terminal.
The company also has agreements with the Gray Oak and Victoria Express pipelines, and the construction of new pipelines and interconnects will tie their infrastructure into the Edna terminal.
“By the time the project is fully complete in 2023, we will have 9 million barrels of storage at Edna and 6 million barrels at the Port, with multiple pipelines to export crude through the Port.” Edwards said, adding that Max Midstream would have nine 16-inch loading arms and three 8-inch barge loading arms at the Port.
Within the next three months, dredging will begin for three docking facilities at the port, thus allowing Max Midstream to bring larger vessels. Max Midstream will also upgrade the existing Seahawk and Edna terminal facilities.
The Calhoun Port Authority has been wanting to deepen and widen the Matagorda Ship Channel for several years. Max Midstream’s $360 million commitment to expand the port facilities includes $225 million specifically for the Matagorda Ship Channel Improvement Project.
Authorization of the ship channel dredging project requires congressional approval, and that is expected to occur by the end of the year. The project would deepen the channel by 9 feet and widen it in the bay by 100 feet; it would also widen the offshore channel by 300 feet.
In the interim, Max Midstream has secured its own lightering zone to perform reverse lightering to export crude onto larger ships like Very Large Crude Carriers (VLCCs). Max Midstream will initially load Panamax ships and reverse lighter to larger ships in its lightering zone.
Once the widening and deepening project is complete, Aframax and Suezmax ships will also be able to load at the Port, making it a viable option for any exporter seeking a port other than Houston or Corpus Christi.
This article was assembled from the Max Midstream press release and a Victoria Advocate report.
adolfo@virtualbx.com
