Port Bureau Updates
Kirby Corporation signs agreement to purchase Higman Marine, Inc.
Kirby Corporation (Kirby) announced on February 4, 2018, the signing of a definitive agreement to acquire Higman Marine, Inc. and its affiliated companies (Higman), for approximately $419 million in cash, subject to certain closing adjustments. The purchase will be financed through additional borrowings.
Higman’s marine transportation fleet consists of 159 inland tank barges with 4.8 million barrels of capacity, and 75 inland towboats. Higman’s fleet moves petrochemicals, refined petroleum products, crude oil, natural gas condensate, and black oil on the Mississippi River System and Gulf Intracoastal Waterway for large midstream and global integrated oil companies. The closing of the acquisition is expected to occur in the first quarter and is subject to customary closing conditions.
David Grzebinski, Kirby’s President and Chief Executive Officer, commented, “The acquisition of Higman and its young fleet of well-maintained inland tank barges and towboats is an excellent fit with Kirby’s operations. Higman’s inland fleet of 30,000 barrel tank barges, approximately 80% of which are clean and 20% heated black oil vessels, has an average age of seven years, and is one of the younger fleets in the industry.”
Mr. Grzebinski continued, “Depending on the purchase price allocations, we expect this acquisition will be earnings neutral in 2018 as it will take time to align Higman’s tank barge utilization rates with Kirby’s, and industry pricing has not yet improved from historically low levels. Additionally, while debt levels will increase in the near term, Kirby’s financial policies remain unchanged, and we expect to rapidly deleverage post-acquisition, which is consistent with our history.”
Mr. Grzebinski concluded, “Overall, as the inland market begins its recovery, the timing of the Higman acquisition is ideal as it will further upgrade our fleet and ultimately allow Kirby to emerge from the downturn larger, more efficient, and better able to serve our customers.
Enterprise and Navigator Gas to build ethylene export terminal
Enterprise Products Partners L.P. and Navigator Holdings Ltd. announced on January 31, 2018, that they have entered into a 50/50 joint venture to build a new ethylene export facility along the U.S. Gulf Coast that will have the capacity to export approximately 1 million tons of ethylene per year. Refrigerated storage for 30,000 tons of ethylene will be constructed on-site and will provide the capability to load ethylene at rates of 1,000 tons per hour. The facilities are expected to be in service by the first quarter of 2020. The project is supported by long-term contracts with anchor customers that include U.S. ethylene producer Flint Hills Resources and a major Japanese trading company.
“This new ethylene export terminal will support the growing production of ethylene on the U.S. Gulf Coast by providing access to international markets,” said A.J. “Jim” Teague, chief executive officer of Enterprise’s general partner. “By 2021, the petrochemical industry is expected to expand aggregate ethylene production capacity in Texas and Louisiana by nearly 50 percent to approximately 90 billion pounds per year. The resulting rapid growth in the supply of U.S. ethylene, combined with increased demand from international markets, like Asia, creates an ideal scenario in which markets abroad are able to diversify their supply by accessing cost-advantaged feedstocks made possible by the shale revolution in the United States. This export terminal will also offer diversification opportunities for domestic petrochemical producers who will not have to rely solely on the export market for derivatives like polyethylene. We are very pleased to work with Navigator Gas in efforts to commercialize an industry-leading ethylene marine export terminal that offers unsurpassed connectivity to ethylene producers and pipeline and storage infrastructure.”
Enterprise is also developing a high-capacity ethylene salt dome storage facility at its complex in Mont Belvieu, Texas. In addition, Enterprise is building a new ethylene pipeline from Mont Belvieu to Bayport, Texas, which is scheduled to begin service in 2020.
Commissioning underway for ExxonMobil’s ethane cracker in Baytown, Texas
ExxonMobil announced on February 6, 2018, that a new 1.5 million ton-per-year ethane cracker at its Baytown, Texas complex is mechanically complete with commissioning progressing well. Project startup is expected during the second quarter of 2018. The new ethane cracker, part of ExxonMobil’s multi-billion dollar Baytown chemical expansion project, will provide ethylene feedstock to the new performance polyethylene lines in Mont Belvieu, which began production in the fall of 2017.
“With the completion of the project in Baytown, we are on the verge of fully realizing one of ExxonMobil’s most significant U.S. Gulf Coast investments,” said John Verity, president of ExxonMobil Chemical Company. “Our new ethane cracker will allow us to economically meet rapidly growing demand for high-performance polyethylene products around the world while continuing to sustain economic development and create jobs for decades to come.”
The project has created more than 10,000 construction jobs and 4,000 related jobs in nearby Houston communities since construction began in 2014. Once operational, it is expected to support 350 new permanent positions at the Baytown complex, $870 million a year in regional economic activity and $90 million per year in local tax revenues.
The Baytown chemical expansion project is a key component of ExxonMobil’s previously announced Growing the Gulf initiative. In addition to the ethane cracker in Baytown, ExxonMobil and SABIC are proposing to build a jointly owned petrochemical complex in San Patricio County, Texas, that would include a 1.8 million ton-per-year ethane cracker – the largest capacity of any ethane cracker built to date.
Massive new supplies of oil and natural gas have dramatically reduced energy costs and created new sources of feedstock for U.S. refining and chemical manufacturing. Most of ExxonMobil’s planned new chemical capacity investment in the Gulf region is focused on supplying export markets such as Asia with high-demand products, which will contribute to strengthening the United States’ balance of trade. Recent changes in the U.S. corporate tax rate also create an environment for increased future capital investments in projects such as these, and will further enhance the company’s competitiveness in global markets.
“The U.S. chemical industry is rapidly expanding along the Gulf Coast due to abundant supplies of domestically produced natural gas, as demonstrated by the investments ExxonMobil alone is making,” Verity said. “This expansion will not only increase the nation’s existing manufacturing and export capacity, but also further stimulate economic growth and create thousands of full-time jobs.”
To support the industry’s need for skilled workers as part of this growth, ExxonMobil has contributed $2 million over the last five years to the Community College Petrochemical Initiative, a training program offered by nine Houston-area community colleges to provide technical skills to high school graduates, returning military veterans and others.
Port of Brownsville sets record for receiving largest cargo ship
The Port of Brownsville set a record January 31 when it received the Nordic Pollux, the largest cargo vessel to ever call on the port to date.
The big tanker is the size of two-and-a-half football fields and almost longer than the combined height of three Statues of Liberty stacked atop one another, measuring 900 feet long and 157 feet wide – just three feet shy of the width of a football field! It’s the longest and widest ship to
call on the Port of Brownsville. The oil tanker made its way from Philadelphia to Brownsville where it loaded approximately 150,000 barrels of heavy naphtha.
Moving a ship this size into port took an experienced harbor pilot and three powerful Signet Maritime tugboats to precisely maneuver the behemoth vessel into place, bumping, pushing and pulling the Nordic Pollux to the Port of Brownsville’s Liquid Cargo Dock 5.
The Brazos Santiago Pilots safely navigated the ship along the port’s 17-mile-long channel and expertly rotated the tanker in the channel turning basin, with all three tugs working in careful unison.
The growing trend of larger ships in the international maritime fleet is influencing big changes in shipping industry infrastructure, like the recent expansion of the Panama Canal and enhanced port infrastructure around the world – including improvements at the Port of Brownsville. The port is building bigger and deeper berths and plans to deepen its ship channel to 52 feet from its current design depth of 42 feet, making the Port of Brownsville among the deepest ports in the Gulf of Mexico upon completion.
Completion of the port’s channel deepening project allows it to accommodate deeper draft cargo ships, making visits by ships like the Nordic Pollux a more common sight.
More Than The Move Foundation hosting first annual Houston vs. Hunger event
More Than The Move Foundation is hosting their first annual Houston vs. Hunger event to provide 100,000 meals to the Houston Food Bank in sustained relief of Hurricane Harvey on March 28th. Their aim for the event is to create a unique opportunity for the logistics industry to empower employers and employees to give back and restore hope locally.
The event will have two locations and four time shifts for each location to allow greater access for participation. If you would like to discuss this opportunity further contact the foundation’s Executive Director, Jamie Hampton, at firstname.lastname@example.org!
- Date March 19, 2018
- Tags 2018 March