Impact Update: Petrochemicals and Port Houston

HOUSTON – (By Michelle Leigh Smith for Realty News Report) – Industry experts weighed in on critical issues with the U.S. Gulf Coast supply chain at the 14th annual Gulf Coast Industry Forum recently.

Ed Emmett, Chair of the Texas Department of Transportation Freight Advisory Committee, and Fellow in Energy and Transportation at Rice University’s Baker Institute asked a panel of supply chain and transportation leaders from petrochemical, maritime, rail and road transportation industries about what keeps them up at night, and what are they greatest challenges now in supply chain.  Even with North America’s largest private rail fleet (33,000 cars) and the fact that the Port of Houston can ship thousands of containers a week, there are the risks that have always come with the territory in the petrochemical business.

Speaking to a crowd at the Pasadena Convention Center, Cynthia Gilg, American Logistics and Distribution Manager for Exxon Mobil, says she always has her eye on the future. Quickly on the heels of an opening of a $2 billion expansion in alpha olefins line. “We are building a hydrogen facility in Baytown to reduce emissions, at Exxon Mobil and in the industry at large.” she said. “It’s still early days – we’re not formally funded, but the time will come soon when we will need ammonia shipping capability.”

Exxon Mobil’s new linear alpha olefins unit in Baytown will produce 350,000 tons per year of Elevexx-branded products, marking an Exxon Mobil debut into this market. Linear alpha olefins are used in plastic packaging, high-performing engine and industrial oils, as well as building blocks for surfactants, which reduce surface tension for cleaning and industrial uses. The drag-reducing agents allow crude to flow through pipelines more efficiently. The new performance polymers line will produce 400,000 metric tons per year of Vistamaxx and Exact-branded polymer modifiers, which can enhance the performance of a broad range of chemical products used to make automotive parts, construction materials, hygiene and personal care products.

Frank Vingerhoets, President of Katoen Natie said he’d expanded his warehouse square footage from what equaled three football fields in La Porte to 120 football fields (180K SF to 7.2M SF) in Deer Park and Baytown as well, with spaces large enough to receive railcars inside. “We’re moving 2,400 railcars of product a month in La Porte,” says Vingerhoets, who also has brought automated self-driving trucks online at his Singapore facility.

Captain Clint Winegar, Presiding Officer, Houston Pilots and VP of the American Pilots Association representing the Gulf states of Texas, Alabama and Mississippi says it’s the weather that keeps him up at night. “We know the costs of closing the Port for even one day translates to $1 billion of economic impact.” He oversees more than 1.4 million vessel interactions in a year, involving ships from tugboats to tankers.

Ric Campo

With eight public terminals and 200 private terminals, the Port of Houston accounts for 19 per cent of the GDP in Texas, providing 1.54 million jobs in Texas and 3.37 million jobs nationally, according to Port Chairman Ric Campo.  “Texas is the No. 1 export state, with 59 percent of the resin exports in the U.S. and we are the No. 1 region,” says Campo. “It’s easier to do business here,” Campos explained. “In 2017, the West Coast ports had 57 % of inbound container traffic. Today it’s 43%.”  That is due to improvements in our intermodal options. “Intermodal is the use of multiple transportation modes for a product move,” Campo said.  “For example, when a shipping container is moved via rail before it goes on a truck for final destination.  As each mode improves, the supply chain benefits.”

John Kueck, Senior Operations Manager for Maersk cites the complexity of cybersecurity concerns as the thorn that interrupts his sleep. The firm that was founded in Copenhagen, Denmark had a breach in the past that they overcame, but the risk of unintended recipients having information that flows from leadership to the stevedores can affect everyone in the supply chain line. They work out of the Barbours Cut and Bayport Container Terminals here. Maersk now has a green methanol vessel in service in northern Europe, with plans for 16 more planned.  “As our fleet ages, we will replace the vessels with green methanol.  He is using “green” trucks in Chicago and expanding capabilities for charging stations in the Gulf Coast area.

Avera Starts Industrial Project
Avera is developing the Kilgore Grand Parkway warehouse in Baytown. Rendering courtesy Avera

Jacob Powell, a Baytown City Councilman and electrical engineer at Covestro found much good news about growth for the Baytown and surrounding areas.  He found the transportation updates to be vital because as transportation wonk Ed Emmett said, “Were always going to need to move stuff.”

Companies from Belgium to Belize converge on the Texas Gulf Coast because of the easy availability of low-cost feed stocks and the Port of Houston’s tremendous access to the fastest shipping lanes. The conference attracted more than 800 attendees.

“This year’s forum was another example of Chad Burke and his team supporting and advancing the two most important economic engines for the Gulf Coast region, the State of Texas and our national security – petrochemical and logistics,” says Jason Fuller, now Managing Director of Straife, a global consulting firm based in Houston providing risk assessment, compliance and corporate strategy for both US and International companies, many of which are in the energy sector.

In another session, managers from Houston Ship Channel petrochemical plants discussed expansion projects and challenges provided by current U.S. and world economies.

Growth and expansion themes were keynoted by Port Houston chairman Ric Campo, preceded by a morning highlight from Steve Prusak, Chevron Phillips Chemical’s Senior VP of Corporate Planning and Technology announcing a $5 billion expansion in Orange, Texas. A discussion on the global geopolitical energy landscape impact on Texas delivered by Ryan Sitton, the first engineer elected to serve as Texas Railroad Commissioner and founder and CEO of Pinnacle ART, headquartered in Pasadena followed.

Robust energy conversation continued with a Shell Sustainability panel providing examples of Shell Gulf Coast facilities meeting customer demand for low-carbon products. Oil, gas and petrochemical operations are reducing carbon footprint and eliminating plastic waste.

The Gulf Coast Industry Forum concluded with local and state leaders highlighting the economic impact of Port Houston and the petrochemical industry on Houston, the U.S. and global economies. Texas Sen. John Whitmire, and longtime Greater Houston Partnership leader, Bob Harvey, headlined that panel. Dennis Winkler moderated that panel. Prior to founding his own firm, Winkler worked as Houston Public Affairs Manager for Shell Oil Company in Deer Park.


Sept. 28, 2023 Realty News Report Copyright 2023

Photo  Enterprise Products tanks in Pasadena area

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