Port Bureau Updates

Andrew Lipow
President, Lipow Oil Associates, LLC
Thursday, September 14, 2017 Commerce Club Luncheon

Andrew Lipow is the President of Lipow Oil Associates, a consulting firm which he founded in May 2004. Lipow Oil Associates specializes in refinery operations, bulk liquid storage terminals and provides expertise in crude oil and petroleum product trading opportunities. He is also familiar with the blending of ethanol and biodiesel and its limitations and can provide guidance on the Renewable Fuel Standard.

Lipow has also provided consulting services for entities involved in the acquisition of refining and midstream assets. Prior to that, Lipow traded crude oil, gasoline, jet fuel and distillate at Vitol, a privately held trading company, for seven years. In addition, he traded oil based commodities at Basis Petroleum and J. Aron. Lipow has supply and refining experience from his 16 year tenure at Amoco Oil Company and Amoco Corporation.

Lipow is a frequent guest on Fox Business News and CNBC, and has appeared on the nightly newscasts of the major networks. Thank you to our Annual Table Sponsors Enterprise Products Partners L.P., Houston Pilots, Moran Shipping Agencies, Regions Bank, Richardson Companies, Targa Resources and West Gulf Maritime Association, and Table Sponsors ACBL and Kinder Morgan. Register for the Commerce Club luncheons by visiting www.txgulf.org/events/commerce-club or by calling the Port Bureau at 713-678-4300.

LyondellBasell to Build the World’s Largest PO/TBA Plant in Texas

LyondellBasell, one of the world’s largest plastics, chemicals and refining companies, announced on July 21, 2017, the final investment decision to build the world’s largest propylene oxide (PO) and tertiary butyl alcohol (TBA) plant in the Houston area. The project is estimated to cost approximately $2.4 billion, representing the single-largest capital investment in the company’s history. At the peak of construction, the project is expected to create up to 2,500 jobs and approximately 160 permanent positions when operational.

“This world-scale project is a key part of our organic growth strategy which is designed to meet rising global demand for both urethanes and cleaner-burning oxyfuels while creating real, long-term value for our shareholders,” said Bob Patel, CEO of LyondellBasell. “Our investment in this plant combines the best of both worlds: our leading PO/TBA process technology with proximity to low-cost feedstocks, which gives LyondellBasell a competitive advantage in the global marketplace for these products.”

“We are pleased that LyondellBasell continues to view the Houston area as important to their global operations, creating jobs and opportunities for Houstonians,” said Bob Harvey, president and CEO of the Greater Houston Partnership. “This new project further advances Houston’s position as a global hub of petrochemical manufacturing, leveraging Houston’s strategic access to the Americas and top markets around the world.”

Once in operation, the plant will produce an anticipated 1 billion pounds of PO and 2.2 billion pounds of TBA annually. PO is used in the manufacture of bedding, furniture, carpeting, coatings, building materials and adhesives, while the TBA will be converted to two ether-based oxyfuels, methyl tertiary butyl ether (MTBE) and ethyl tertiary butyl ether (ETBE). Both MTBE and ETBE are high-octane gasoline components that help gasoline burn cleaner and reduce emissions from automobiles.

LyondellBasell plans to sell the PO and derivative products to both domestic and global customers, while the oxyfuels will be primarily sold into Latin America and Asia. A portion of the TBA will remain in the domestic market in the form of high purity isobutylene which is used in tires and lubricants.

The majority of the products will be exported via the Houston Ship Channel.

The PO/TBA project will have a split facility design to optimize product balances and realize synergies between LyondellBasell sites. The proposed location for the PO/TBA plant is the LyondellBasell Channelview Complex located in Channelview, Texas. The associated ethers unit, which will convert TBA to oxyfuels, is proposed for the company’s Bayport Complex near Pasadena, Texas.

The company has completed front-end engineering design work and received the required environmental permits. Site preparation is underway and construction is expected to begin during the second half of 2018. It is anticipated the project will be completed by the middle of 2021. Final site selection is contingent upon final approval of certain economic incentives by the state of Texas.
The PO/TBA project is part of LyondellBasell’s $5 billion organic growth program taking place on the U.S. Gulf Coast. LyondellBasell recently completed ethylene expansion projects at the company’s La Porte, Channelview, and Corpus Christi sites in Texas, finalizing a multi-year plan to increase annual ethylene capacity in the U.S. by 2 billion pounds. Additionally, LyondellBasell began construction of a world-scale polyethylene (PE) plant at its La Porte Complex, which utilizes the company’s proprietary Hyperzone PE technology and will more than double that site’s PE capacity to 2 billion pounds per year upon completion in 2019.

Two Houston Pilots to Receive International Maritime Industry’s Highest Award for Bravery at Sea

The International Maritime Organization (IMO) has named two Houston Pilots – Captains Michael McGee and Michael Phillips – as recipients for the 2017 Award for Exceptional Bravery at Sea. They are the first harbor pilots ever to be nominated and named recipients of the prestigious IMO award, announced Captain Robert M. Shearon, presiding officer.

Nominations for the award are solicited annually worldwide from United Nations member states, intergovernmental organizations, and non-governmental international organizations in consultative status with the IMO. While nominations are accepted annually, the award is only presented when merited. The International Maritime Pilots Association nominated the two Houston Pilots. The awards will be presented November 27 at a special IMO ceremony.

Last February, the Rear Admiral David R. Callahan for the USCG 8th District presented Meritorious Public Service Awards to Captains McGee and Phillips for their fearless actions in preventing a disaster on the busiest commercial shipping waterway in the United States.

Captains McGee and Phillips were dispatched September 6 to the M/T Aframax River at Houston Fuel Oil Berth 3. Due to its large size, this massive tanker required two pilots. McGee was conning the vessel and undocking when the ship experienced an engine failure and struck two mooring dolphins located just off of the end of ITC Berths 7/8 at about 0010 hours.

As a result of the contact, a port fuel tank ruptured causing a spill of diesel fuel that ignited and burned. The pilots maintained their stations in the wheelhouse surrounded by a towering wall of burning fuel. The water and the vessel were engulfed with flames. With disaster seemingly imminent, Phillips turned to McGee and warned, “We are going to die.” The blaze would burn for 90 minutes before being extinguished, allowing McGee to return the vessel safety to dock.

“Capt. McGee has been a Houston Pilot for 18 years and Capt. Phillips for 24 years. They exemplify the quality of master mariners who comprise the Houston Pilots Association,” said Capt. Shearon. “We are very proud of them as well as of their achievements and contributions to state pilotage.”

Port Bureau Staff Updates

The Port Bureau is proud to announce the addition of CAPT Mike Cunningham to the Port Bureau staff as director, program management. Mike comes to the Port Bureau with over 27 years’ Coast Guard experience, including as Deputy Commander, Coast Guard Sector Corpus Christi, the Coast Guard Attaché to Mexico, and as a Judge Advocate at a number of units. He has extensive experience coordinating and working on projects involving multiple agencies, including in maritime security, regulatory compliance, contingency planning and response, and waterways management. As Coast Guard Attaché to Mexico, Mike worked closely with the Mexican Navy as it prepared for its expanding responsibilities for maritime safety and security, as Mexico began the process of opening its energy and offshore sectors to foreign companies. As a Judge Advocate, Mike served as the Legal Advisor to the original promulgation of the MTSA security regulations.
Mike will be heading up the Port Bureau’s efforts to improve vessel traffic efficiency in the Port of Houston. He will also support project management for the Houston Ship Channel Security District.

The Port Bureau is also proud to announce Christine Schlenker has been accepted in to Texas A&M’s Master of Science in Analytics program. Christine will still be working full time at the Port Bureau while pursuing the degree over the next two years.

  • Date September 6, 2017
  • Tags Aug.-Sept. 2017