Though the Port of Houston and its ship channel is widely known as the Gulf Coast region’s behemoth import/export hub, the impact made on the economies of Texas and the U.S. by its more southerly counterpart, the Port of Corpus Christi, should not be underestimated.
Since 2015, when it became the first port to export crude oil from the U.S. after Congress lifted a 40-year ban on U.S. oil exports, the port has proven itself a leading energy hub for refining, crude oil and petroleum ethane crackers, as well as liquid petroleum gas (LPG) exports.
The Port of Corpus Christi Authority is the No. 1 crude oil export port, the fourth largest port in the U.S. by tonnage and is responsible for $150 billion in impact on the U.S. economy.
Additionally, according to data from Port Industries of Corpus Christi (PICC) — a Coastal Bend alliance made up of energy industry leaders — the port supports more than 8,000 employees and contractors, providing approximately $640 million in employee wages.
Of its many advantages to the global energy export industry, the Port of Corpus Christi is able to accommodate very large crude carrier (VLCC) ships.
“There is significant cost savings in [utilizing] a VLCC-sized ship,” Port of Corpus Christi Chief Commercial Officer Jarl Pedersen said. “If you look at the cost of a VLCC going to Rotterdam [as compared to] an Aframax or a Suezmax, a VLCC certainly has a much lower cost.”
A VLCC going to South Korea, Pedersen said, will have a 75-cents-per-barrel lower cost, “even though it goes around Cape Horn rather than through the Panama Canal.” There is also a significant cost savings in employing VLCCs to travel to and from the Singapore market, Pedersen said, addressing attendees at the Association of Chemical Industry of Texas (ACIT) South Texas Economic Outlook Luncheon held recently in Corpus Christi, Texas. “It’s very important to the industry that you have cargoes going both ways,” Pederson added, to achieve maximum shipping efficiency when utilizing VLCCs.
“For example, load light, sweet crude in the United States, send it to Europe, then go back with some heavy crude for U.S. refineries,” he said.
Looking to the future
Pedersen said the No. 1 priority is to deepen and widen Port of Corpus Christi’s channel. This expansion of the port’s 36 miles of ship channel is authorized to deepen the channel to 54 feet MLLW or approximately 8 feet deeper than its currently 46-foot MLLW depth. MLLW is defined as “mean lower low water,” or the average level of low water heights, as affected by tides.
The economic impact of this channel improvement project, Pedersen said, translates to $35 billion per year in additional export value and improved trade balance, with annual shipping cost savings of $100 million.
The project is scheduled to begin in early 2018.
Pedersen expects continued growth in the Corpus Christi region, based on channel expansion as well as the availability of real estate that surrounds the port and channel.
“Our mission is to leverage commerce to the region, and we want to do so by creating jobs and economic growth. We welcome companies to come here,” Pedersen said.
Pedersen stipulated the port expects companies it does business with to subscribe to the Port of Corpus Christi’s “pillars of success”: to deliver job creation and economic growth, to promote environmental stewardship and sustainability as well as educational and workforce development, and to prioritize safety and corporate social responsibility.
“There are significant opportunities for growing the economy in this region,” Pedersen concluded. “That’s what we are preparing for. We are preparing for the future.”
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