Tuesday, September 4, 2012

Gulf Coast Ports Focus South

By Jim Shaw

Ports along the Gulf of Mexico are continuing to focus on developments to the south, in particular the new locks at the Panama Canal, due to be completed in early 2015, and the expanding economies of Latin America. While the enlarged locks at Panama will route larger container ships through the Caribbean they will also allow bigger bulk carriers to load at Gulf ports for Asia. This is expected to lure some Asia-bound bulk commodities currently moving to West Coast ports by rail south to Gulf gateways for export. In anticipation of this shift several new high-capacity floating cranes are being acquired by Mississippi river-based midstream operators while new bulk terminal developments are underway in Louisiana, Texas, Mississippi and Florida. Expanded container traffic is also being eyed, particularly by the ports of Tampa, Mobile, New Orleans and Houston, while cruise ships have not been forgotten. The latter vessels, in fact, are finding a growing customer base in the Gulf area as new facilities are developed and the destruction wrought by hurricane Katrina of 2005 is largely repaired. This will mean addition business for such ports as Tampa, New Orleans and Galveston as cruise ship operators reposition larger vessels to take advantage of expanding demand.

Tampa Bay
On the eastern fringe of the Gulf, in Tampa Bay, Florida’s Port Manatee has inaugurated cargo operations at its new Berth 12. Port Manatee Executive Director David L. McDonald said the 1,600-foot-long berth can accommodate Panamax-sized vessels and will eventually be joined by an adjacent 52-acre container terminal. The latter will be developed to attract new cargoes expected after completion of expansion work at Panama. Berth 12 has a 41-foot depth of water alongside and is served by two mobile harbor cranes. The berth and planned box terminal are considered the final pieces of Port Manatee’s 11-year, $200 million port modernization and expansion program. However, while Berth 12 has been completed on time and on budget a second project at the port, covering the development of a new LNG terminal, has fallen well behind schedule. The $850 million Port Dolphin Energy project envisioned the laying of a 36-inch diameter offshore natural gas pipeline in a water depth of 100 feet some 28 miles southwest of Tampa Bay. LNG tankers would connect to the pipeline and send gas into Port Manatee where it would be routed though existing lines for distribution but the sudden wealth in domestic natural gas has dampened demand for the facility. Nevertheless, developers, including Norway’s Höegh group, say the facility may still be completed by late 2016 or early 2017 to bring domestic LNG into Florida from Louisiana and Texas.

Next door in Alabama the Alabama State Port Authority (ASPA) is moving forward with a number of modernization and expansion projects at the Port of Mobile. One of the most important is construction of the Garrows Bend Intermodal Container Transfer Facility (ICTF), a project that, when finished, will directly connect containerized imports and exports from Mobile’s docks to major railroad lines across the country. Earlier this year the US Department of Transportation approved a $12 million TIGER grant for Phase 1 of the project, which is expected to cost over $30 million to fully complete, including site stabilization, a rail bridge, rail tracks and paving.

To be constructed adjacent to APM Terminal Mobile, formerly known as the Mobile Container Terminal, the ICTF will cover 62 acres and have three working tracks, three support tracks and a run-around track, with the total complex capable of handling three unit trains per day.

Another port project, expected to be completed later this month, is the construction of an additional cargo storage area at Pier C North where an existing rail car conveyor pit, transit shed foundation and several unused rail lines have been removed and the site paved over. This is giving the port an additional 244,840 square feet of laydown area for such cargoes as steel beams, hot rolled coils and steel plates. The additional area is needed to support nearby steel mills operated by Germany’s ThyssenKrupp that are beginning to move more cargo through the port, with steel volume more than tripling to 3.6 million tons over the last two fiscal years.

St. Bernard
Looking at expanding dry bulk commodity shipments off the Gulf, Associated Terminals LLC at St. Bernard, Louisiana has taken delivery of its seventh barge-mounted Gottwald crane for river stevedoring work after having the 8400B model unit installed on a barge fabricated by Conrad Industries. Associated has been using its fleet of floating cranes, including six 6400B models, for midstream cargo handing operations between mile markers MM 56,8 and MM 141 on the lower Mississippi. The 8400B model 8, which is of higher capacity than the earlier 6400Bs, will be used to transship dry bulks such as ores, coal, grain and fertilizers between seagoing vessels of up to 1,150 feet in length and inland waterway barges.

According to supplier Demag Cranes the 8400B can cope with loads of up to 100 tons while having an 63-ton grab curve. Depending on operating conditions the barge-mounted unit can handle up to 1,850 tons of dry bulk materials per hour.

The crane brings to 15 the number of Gottwald cargo handling cranes working on the lower Mississippi, with another 8400B model to follow shortly. This unit, to be delivered by Demag to Impala Warehouses LLC, will be used at the Burnside Terminal operated by Impala in Ascension Parish, Louisiana where it will predominantly handle bauxite and coal.

South Louisiana
In Louisiana’s St. James Parish the Port of South Louisiana is moving ahead with plans to build a new container facility on the Mississippi at the Bonnet Carre Spillway between New Orleans and Baton Rouge. The port’s engineering consultants, URS, have been studying a site near the Spillway where a 2,000-foot long dock and adjacent container yard and intermodal rail facility could be constructed for approximately $760 million. Additional construction phases would bring the total project cost to about $1.3 billion. The port is seeking $16.8 million in startup costs from the state, but port officials say most of the project would be financed through private investors. Joel T. Chaisson, the port’s executive director, said URS picked the Spillway site because of its proximity to the Kansas City Southern and Canadian National railroads as well as to Interstate route 55.

The port had earlier been in discussions with the US Army Corps of Engineers about building a dock across the front of the spillway but the current proposal places the dock in an area known as the Forebay where it wouldn’t impede water flow through the spill structure. Another advantage of the latest site is that it is adjacent to an existing anchorage on the Mississippi, although there is some local concern about the impact the terminal would have on the nearby Montz Park, which lies within St. Charles Parish.

New Orleans
The Port of New Orleans has completed a major expansion of its Napoleon Avenue container terminal while also consolidating two small cruise terminals to form the new $20 million Julia Street Cruise Terminal. Improvements at Napoleon Avenue, now the port’s premier container operation, include the addition of two new gantry cranes capable of a 19-row-across reach and an additional 4.5 acres of marshaling area. This gives the facility a capacity to handle about 640,000 TEUs per year and represents a $36.4 million investment. The box terminal is operated by Ports America and New Orleans Terminal, a joint venture established between the Mediterranean Shipping Company (MSC) and local terminal operator Ceres Gulf Inc. Besides MSC, a number of major ocean carriers, including Hapag-Lloyd, CMA-CGM, Seaboard Marine, Maersk, CSAV and Zim, will be making use of the terminal on a regular basis.

Down river from Napoleon Avenue the newly consolidated Julia Street Cruise Terminal is expected to host nearly 1 million cruise passenger embarkations and disembarkations annually while serving as a seasonal homeport for Royal Caribbean International and Norwegian Cruise Line. At the same time, the port’s nearby Erato Street Cruise Terminal, which opened in 2006, is continuing to serve as a year-around base for Carnival Cruise Lines.

Another port looking at the expansion of cruise facilities is the Port of Galveston, Texas, which operates cruise berths at Pier 25 and Pier 27 but needs additional capacity to support five ships that will be sailing from the port by the end of the year. Two of these, Carnival Cruise Lines’ Carnival Magic and Carnival Triumph, will be sailing year-round while Royal Caribbean International’s Mariner of the Seas will operate out of Galveston only during the winter months. However, next month Disney Cruise Line will position its Disney Magic to the port while Princess Cruises will launch winter sailings with its 113,000-gt Crown Princess starting in December. Finding space for all these ships is becoming a problem and some lines have already had to modify their schedules to avoid having three ships in port on the same day. In June, Galveston’s Board of Trustees approved an agreement between Galveston Port Facilities Corporation and the design and consulting firm of CH2M Hill covering a conceptual study of how to host additional ships on the same day.

Last year, Galveston spent about $12 million on improvements to its facilities used by Carnival so that it could handle the line’s larger and longer vessels. Since then, TMP-PRISMA Marina Management LLP, which is affiliated with the Texas, Mexico & Pacific Railroad, has indicated it would like to form a public/private partnership with the port to develop about 96 acres of port-owned land on Pelican Island for the development of a new combination cruise and cargo terminal. Land on the island has also been earmarked for the potential development of a container terminal by the port as well as a large dry bulk handling facility by private investors.

Another Texas port looking at new terminal development is the Port of Freeport, which enjoyed its best fiscal year ever in 2011 when total cargo volume rose to a record 2,102,431 tons, up a remarkable 16.3 percent from the port’s previous high posted in fiscal 2010. At the same time, Freeport’s total operating revenue rose 10.9 percent to a new record of $15.6 million. This has been during a period when many ports in the US and abroad have been witnessing declining volumes and revenues. Among significant contributors to Freeport’s banner year was drilling company Transocean Ltd, which used the port as a base for shuttling materials and personnel to and from its operations in the Gulf of Mexico.

Freeport has also continued to maintain its position among the top three US gateways for banana imports while moving steadily into the handling and storage of wind energy components. The port is currently moving forward with its Berth 7 construction project, considered a key element in the development of the new Velasco Terminal, which at full build-out will feature three deepwater berths and 90 acres of backlands.

The terminal is to benefit from a channel widening and deepening program expected to get underway next year. In April, Phyllis Saathoff, the port’s managing director since 1994, was named interim executive director and CEO following the retirement of A.J. “Pete” Reixach Jr. after 20 years of service. Pete has since been elected chairman of the American Association of Port Authorities (AAPA) board.

Corpus Christi
In western Texas, the Port of Corpus Christi has entered into a sales agreement with Oxy Ingleside Property Holdings, LLC, a wholly owned subsidiary of Occidental Petroleum Corporation (Oxy), for the purchase of approximately 816 acres of the former US Naval Station Ingleside and more than 460 acres of adjacent port-owned property for $82.1 million. Closing on the sales agreement, which includes a separate $7 million bid for the Naval Base’s 100-acre “Campus” section, is expected to take place shortly.

The pier at the naval base site was earlier sold to Flint Hills Resources for $8.5 million. Oxy is the third-largest US oil and gas company by market capitalization and its wholly-owned subsidiary, Occidental Chemical Corporation, has operated a chemical plant at Ingleside since 1987.

The new Ingleside acquisition will allow an expansion of the company’s current operations in the area and may include the construction of infrastructure that would allow liquefied petroleum gas (LPG) to be loaded onto barges at the site. In addition to the Oxy agreement the port is continuing its negotiations with Ambre Energy and Cline Mining Corporation concerning the possible construction of a new coal export terminal within the port’s 1,100-acre La Quinta Trade Gateway complex. If built, this facility would have a capacity to move more than 20 million tons of coal annually. La Quinta is also being marketed by the port as a future container terminal and industrial park site. To streamline rail operations at the site the port will use a $10 million federal grant to partially fund an $18 million modernization and expansion of the Nueces River Rail Yard. Last year Corpus Christi handled over 80 million tons of cargo, the bulk of it petroleum products.