Longview Port Seeking Terminal Developer

By Mark Edward Nero

The Port of Longview is seeking proposals for available industrial waterfront property, calling it a significant opportunity to establish new cargo operations on the Columbia River.

Bridgeview Terminal, which is comprised of two cargo docks and upland areas, became available earlier this year when a long-term lease with its former bulk cargo operator/tenant, Kinder Morgan, expired in March. The port is primarily interested in responses to import or export bulk cargos, but that it would consider opportunities for other marine-dependent uses.

“Opportunities to establish new terminal operations or terminal redevelopment are minimal on the West Coast,” Business Development Manager Laurie Nelson-Cooley said. “Our intent is to maximize this terminal based on cargo throughput, job creation and return on investment to our customers and community partners.”

Issuing the Request for Proposal is the second step in the redevelopment of Bridgeview Terminal. In June, the port issued a Request for Expression of Interest to determine interest in the property.

The Request for Proposal document and related documents can be found on the port’s website at http://www.portoflongview.com/DoingBusiness.aspx.

The Port of Longview, operating since 1921, has eight marine terminals and waterfront industrial property spanning 835 acres on the deep-draft Columbia River, 66 miles from the Pacific Ocean in Southwest Washington State. It’s the first port on the deep-draft shipping channel with direct transportation connections to international markets.

Kinder Morgan Buying Tanker Companies

Kinder Morgan Energy Partners said Dec. 23 that it is buying American Petroleum Tankers (APT) and State Class Tankers (SCT) from affiliates of The Blackstone Group and Cerberus Capital Management for $962 million in cash.

“This is a strategic and complementary extension of our existing crude oil and refined products transportation business,” John Schlosser, president of KMP’s Terminals division said in a statement.

APT and SCT are involved in the marine transportation of crude oil, condensate and refined products in the United States domestic trade.

APT’s fleet consists of five medium range product tankers, each with 330,000 barrels of cargo capacity. With an average vessel age of about four years, the APT fleet is one of the youngest in the industry. Each vessel is operating pursuant to long-term time charters with major integrated oil companies, major refiners and the US Navy.

Crowley Maritime operates APT's vessels.

SCT has commissioned the construction of four medium range product tankers, each with 330,000 barrels of cargo capacity. The vessels are scheduled to be delivered in 2015 and 2016 and are being built by General Dynamics’ NASSCO shipyard. Kinder Morgan says it plans to invest about $214 million to complete construction of the SCT vessels.

“Product demand is growing and sources of supply continue to change, in part due to the increased shale activity,” Schlosser explained. “As a result, there is more demand for waterborne transportation to move these products. We are purchasing tankers that provide stable fee-based cash flow through multi-year contracts with major credit worthy oil producers.”

The transaction, which is subject to standard regulatory approvals, is expected to close during the first quarter of 2014.

Port of St. Helens Coal Export Plans Dropped

Energy company Kinder Morgan on May 8 said it has abandoned plans to build a coal export terminal at a Port of St. Helens industrial park, but says it will consider other Pacific Northwest locations for the facility.

The Houston-based company had been exploring the possibility of putting a terminal in place since early 2012. According to spokesman Allen Fore, Kinder Morgan decided not to seek permits not because of community and regional opposition to coal exports, but because of site logistics. The company couldn’t find a favorable configuration for conducting business, he said.

In January 2012, Kinder Morgan had proposed to design, build and operate a state-of-the-art coal export terminal at the Port of St. Helens’ Port Westward Industrial Park.

The proposed terminal was estimated to require $150 to $200 million in capital investment for construction and development, and would have generated an estimated 80 full time jobs to manage and operate the facility, according to Kinder Morgan. The project could have created more than 150 construction jobs over an 18 to 30 month period, according to estimates.

It was one of more than half a dozen proposed coal projects in the region the past few years, only three of which – Gateway Pacific Terminal, planned for Cherry Point, Washington, Millennium Bulk Terminal, planned for Longview, Washington, and a planned Port of Morrow facility near Boardman, Oregon – are still active.

Despite moving on from the Port of St. Helens, Kinder Morgan says it will explore other potential sites in the Pacific Northwest, where it has a sizable presence.

The company’s holdings in the region include two terminals in Portland that distribute gasoline and diesel to gas stations and load barges going up the Columbia River to supply eastern Oregon and Washington; a pipeline that transports gasoline and diesel from Portland to Eugene; and a dry bulk export terminal within the Port of Portland that handles soda ash, a common ingredient in glass.

Portland Upgrading Terminal for Soda Ash Exports

Work is now underway for a Kinder Morgan soda ash export facility at the Port of Portland’s Terminal 4. The work, which includes the installation of a new ship loader, removal of an outmoded structure and dredging alongside the docks, is expected to be complete in September.

Kinder Morgan committed to buy and install the new ship loader at Terminal 4 in 2012 while negotiating a new 10-year lease extension that went into effect at the start of 2013. The work is expected to cost about $9.5 million.

Kinder Morgan has managed soda ash export operations at Terminal 4 since 1998 – and under a different name when the mineral bulk facility was originally constructed in 1987. The product is exported by the world’s largest soda ash exporter, American Natural Soda Ash Corp. (ANSAC), which operates as the sales, marketing and logistics arm for three US producers of natural soda ash.

Soda ash is used in the manufacture of glass and detergents. It’s exported through Portland to countries around the world and is mined in Green River, Wyoming, home of the largest known natural deposits in the world.

Soda ash arrives in Portland loaded on trains and is then stored in a covered structure until it’s loaded onto bulk cargo ships via a ship loader conveyor system. That ship loader portion of the conveyor system is being replaced by a state of the art, high capacity loader that’s expected to increase productivity and efficiency.

In September, maintenance dredging is scheduled at the ship berths to allow unimpeded access for ships leaving Terminal 4 fully loaded. Since 2008, about 5,000 cubic yards of new sediments have accumulated to the degree that its 40-foot operating depth is close to being compromised, according to Portland. The work is being conducted under contract by the port, per its lease agreement with Kinder Morgan.

Landholder Opposes St. Helens Coal Export Terminal

The company controlling much of the land where the Port of St. Helens wants to place a coal export terminal has rejected a proposal to build the facility, saying that the project could result in too much pollution.

Portland General Electric, which controls about 850 acres of land at the Port Westward industrial park, says that coal dust from the proposed terminal could negatively impact the air that’s used for combustion at two nearby natural gas plants.

Kinder Morgan has plans to build and operate a 100-acre coal export terminal on part of developable land that PGE operates. The utility can sublease the land under a 99-year lease that it signed with St. Helens in 2008. Under the lease, the utility has the final say on what portions of the property are used for.

PGE this week publicly said that it believes that coal dust could cause problems for its nearby facilities and that it was concerned by a potential increase in rail traffic.

The export facility would cost between $150 million to $200 million to build and export 15 million tons of coal to Asia annually, according to Kinder Morgan. If plans to place the terminal at the Port Westward complex fall through, the Port of St. Helens still has hundreds of acres of land elsewhere that could be designated as suitable for the project, according to the port, and other options are still being considered.

With its opposition, PGE is now in solidarity with the Sierra Club and other environmental groups that have been opposed to the coal export terminal on the grounds that it would result in bringing air and noise pollution to the area.

The Port of St. Helens commission has already approved another coal export facility at Port Westward, however. Under the project, which would be run by Ambre Energy North America, coal would arrive at the terminal via barge rather than train, then transferred to ships at the dock.