Port Bureau Updates

October Commerce Club-How will the IMO 2020 0.5% sulphur cap affect stakeholders?

Melissa Williams Shell Trading

The Greater Houston Port Bureau will host our monthly Commerce Club luncheon October 11th. Our guest speaker Melissa Williams has played a key role in Shell to prepare for the IMO 2020 fuel specification change.

Melissa is Shell’s Global Sales & Marketing Manager for Marine Bunker Fuel. In this role, she is responsible for the International Marine Sales and Marketing business in Trading. She has played a key role in Shell to prepare for IMO 2020 fuel specification change. Prior to this role, Melissa was Enterprise Optimization manager for Motiva (JV between Shell and Saudi Aramco) where she ensured all of Motiva’s assets were maximizing margin. In addition, to providing market intelligence and price premises to the organization, she was critical in the development of Motiva’s Trade organization. Melissa has had several Economics and Scheduling roles at Shell Deer Park and Motiva Convent refineries. She was also the Crude and Feedstock manager for Motiva during the startup of North America’s largest refinery, Port Arthur. To RSVP go to: txgulf.org/commerce-club 



Contanda LLC to Begin Construction on New Houston Storage Terminal

Contanda LLCContanda Terminals LLC, a provider of bulk liquid storage and logistics services in North America, announced in late August plans to construct a new, large-capacity storage terminal on its property along the Houston Ship Channel to support its strategic expansion into the petrochemical and hydrocarbon storage markets.

The new, state-of-the-art terminal will be called the Contanda Houston Jacintoport Terminal and will provide up to 3.0 million barrels of additional petrochemical and hydrocarbon storage capacity. The terminal complex will be situated at the company’s Jacintoport terminal site located at the Contanda Steel location, which was acquired in the fourth quarter 2016. “This expansion builds on our already established presence for our Houston-based markets,” said G.R. (“Jerry”) Cardillo, president and CEO of Contanda. “This project meets the growing needs of our customers who have requested additional storage and logistics services to support their growth initiatives. The new Contanda Houston Jacintoport Terminal will strengthen our position as a leading storage provider in our growing, renewable, petrochemicals and hydrocarbons markets and allow us to continue our growth platform in and around the Houston Ship Channel.”

This expansion will add a third Houston-based bulk liquid storage facility to the Contanda portfolio. The automated terminal will provide up to 3.0 million barrels of additional petrochemical and hydrocarbon storage capacity, a deep-water ship dock, two barge docks along with truck and rail infrastructure. The construction is scheduled to begin October 2018 and is expected to be operational during fourth quarter 2019. During construction, the project will create more than 200 jobs. Upon completion, there will be over 20 permanent positions at the Houston facility.

The development of Contanda Houston Jacintoport and Contanda Houston Greens Bayou Terminals are key components of the company’s business plan to double its storage capacity over the next five years. Houston-based Contanda currently operates two storage terminals in the Houston area and 12 other bulk terminals across North America.

Enterprise Expanding LPG Capacity at Houston Ship Channel Terminal

Enterprise Products Partners announced on September 10 that construction was under way to increase loading capacity for liquefied petroleum gas (“LPG”), primarily propane and butane, at the Enterprise Hydrocarbon Terminal (“EHT”) by 175,000 barrels per day (“BPD”), or approximately 5 million barrels per month. The expansion will bring total LPG export capacity at EHT to 720,000 BPD, or approximately 21 million barrels per month.

Upon completion of this expansion project, EHT will have the capability to load as many as six Very Large Gas Carrier (“VLGC”) vessels simultaneously, while maintaining the option to switch between propane and butane loadings. Once operational, the expansion will allow EHT to load a single VLGC in less than 24 hours, creating greater efficiencies and cost savings for customers. The incremental capacity is expected to be available in the second half of 2019.

“Enterprise is already the largest exporter of propane in the world and this expansion project will increase our ability to export LPGs from the EHT facility by another 30 percent with nominal capital investment,” said A.J. “Jim” Teague, chief executive officer of Enterprise’s general partner. “Domestic production of hydrocarbons continues to exceed expectations and U.S. demand. U.S. LPG production currently exceeds U.S. demand by over one million barrels per day and domestic export terminals are approaching full utilization. We estimate that U.S. LPG production could increase by up to an additional 1.5 million barrels per day by 2025. Without access to international markets, excess LPG supplies would lead to a curtailment in U.S. crude oil and natural gas production growth. Marine terminal expansions like ours will be essential to balancing the market and meeting growing global demand for U.S. hydrocarbons.”

LyondellBasell Begins Construction of the World’s Largest PO/TBA Plant

LyondellBasell, one of the world’s largest plastics, chemicals and refining companies, officially broke ground on August 22, 2018, on what will be the largest propylene oxide (PO) and tertiary butyl alcohol (TBA) plant ever built.

The Houston area project is estimated to cost $2.4 billion, representing the single-largest capital investment in the company’s history. Once in operation, the plant will produce 1 billion pounds (470,000 metric tons) of PO and 2.2 billion pounds (1 million metric tons) of TBA annually. Startup of the plant is planned for 2021.

“Today’s groundbreaking is a historic moment for our company,” said Bob Patel, CEO of LyondellBasell. “This plant will be the largest of its kind, built to meet the rising global demand for urethanes used by billions of consumers each day and clean-burning oxyfuels that will help improve air quality around the world. The construction of this project will provide jobs for our neighbors, support local businesses and strengthen our communities with increased tax revenues across the greater Houston region. As one of the cornerstones of our global growth strategy, the new plant will strengthen our ties in Houston and generate long-term value for our shareholders.”

To optimize product balances and realize synergies between LyondellBasell sites, two facilities will be constructed on existing manufacturing sites. The 140-acre PO/TBA plant will be built at the LyondellBasell Channelview Complex located in Channelview, Texas while an associated 34-acre ethers unit, which will convert TBA to oxyfuels, will be built at the company’s Bayport Complex in Pasadena, Texas.

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.

Moran Shipping Agencies and NCC Group Work Together on Maritime Cyber Security

Moran Shipping Agencies, Inc., and global cyber security and risk mitigation expert, NCC Group announced in August their strategic alliance in maritime cyber security. This alliance introduces a holistic approach to maritime cyber security that combines both organizations’ expertise to produce operationally relevant and realistic assessments and solutions that are sensible and uniquely tailored to the maritime industry.

The maritime industry faces a growing need to assess the security and risk that is associated at all levels of shipping operations. Leveraging NCC Group’s established global transportation assurance practice with Moran’s leading maritime operational know-how, both companies are positioned to provide a unique set of security consulting services that focus on understanding operational threats and how they may be realized by technical threats and vulnerabilities. This focus on Operational Technology (OT) is critical to understanding the complex systems and relationships of the maritime industry. In support of this effort, Moran has recently launched MoranCyber as a resource.

“We are combining Moran’s deep and extensive maritime expertise with our team’s unrivalled cyber security capabilities in this sector. With this alliance, we aim to help improve the security posture of a wider range of maritime organizations,” says NCC Group chief operating officer Nick Rowe.

“This is not just a win for both Moran and NCC Group, but also sets a standard of excellence for cyber security within the maritime space,” says Moran CEO Jim Black.

Moran is the largest independent steamship agency in North America with over 80 years of service to ship owners, charterers, and marine terminals. Moran has pioneered IT and security integration with quality standards in shipping and trade for over twenty years under the leadership of CEO Jim Black and executive vice president and chief information officer Jason Kelly.

“We had been seeking an organization capable of working with Moran to deliver strong, credible cyber security services with a focus in maritime,” says Capt. Alex Soukhanov, director of Moran Cyber. “Teaming with NCC Group allows us to not only better advise our clients on proper precautions in maritime cyber security, but also offer them the resources to mitigate and limit their exposure to risk.”

Section 232 Tariff Update from the American Institute for Steel Update

The White House issued amendments to its proclamations on the Section 232 tariffs placed on steel and aluminum at the end of August. The American Institute for Steel (AIIS) summarizes the three major changes as follows:

  1. Allowing companies to file for exclusions for products from countries that agreed to a quota, an issue highlighted in the July 24 Ways and Means Committee hearing on the exclusions process.
  2. Providing grandfathering for contracts for steel from quota countries that meet the following criteria: entered into before March 8, 2018, contains a schedule that specifies the quantity to be shipped, the steel is being used to construct facilities in the U.S. and cannot be procured from a U.S. supplier that can meet the delivery schedule and specifications, payments in the contract constitute less than 10% of the facility’s construction cost, lack of relief would significantly disrupt the facility’s construction.
  3. Extending retroactive relief back to the date of filing, as opposed to the date of posting on regulations.gov.

For further information or reading, visit the AIIS website at http://www.aiis.org/2018/08/new-white-house-proclamation-on-steel-and-aluminum-tariffs/.

Port Bureau’s Mike Cunningham Elected to Houston Maritime Arbitration Association Board

CAPT Mike Cunningham, USCG (Ret.) GHPB

Congratulations to the Port Bureau’s Mike Cunningham for his election to the Houston Maritime Arbitration Association’s (HMAA) Board of Directors.

The HMAA elected Cunningham to their board of directors at their annual meeting in August. He has a BA from the University of Washington, an MBA from Washington State University, his Master of Law from Georgetown University Law Center, and his Juris Doctor from the Seattle University School of Law.

The Houston Maritime Arbitrators Association was organized as a not-for-profit entity to provide maritime and commercial expertise in Houston. Learn more about HMAA at hmaatexas.org/.

At the Port Bureau, Cunningham is the director of program management at the Greater Houston Port Bureau. He focuses on the Port Bureau’s chemical ship efficiency and AIS programs. He also represents private Houston terminals on the U.S. Coast Guard Sector Houston-Galveston Port Coordination Team.

  • Date September 26, 2018
  • Tags 2018, 2018 Sept