Construction Converts Oil-Patch Flood for Markets
Driftwood liquefaction plant will receive natural gas from three separate pipelines transporting it a total of 873 miles from shale beds.
ILLUSTRATION COURTESY OF TELLURIAN INC.
The U.S. Gulf Coast is bustling with infrastructure projects to manage the nation’s newfound status as a major oil and gas exporter and to serve the demand for its condensates and petrochemicals.
In Texas, the Port of Corpus Christi Authority (PCCA), pursuing its vision to be the “energy port of the Americas,” entered into a series of agreements over the last year to develop capacity to accommodate very large crude carriers (VLCC), able to transport as many as 2 million barrels of oil.
In the latest agreement, reached Oct. 29, PCCA announced a deal with the Carlyle Group to develop the port to accommodate the tankers. Carlyle will lead the construction and ongoing operations of the terminal on an exclusive basis and will arrange private funding for dredging a 75-ft main channel depth to accommodate fully laden VLCCs at Harbor Island. The project will cost an estimated $1 billion, Carlyle officials say. Major construction will begin in 2019, and the terminal is expected to be operational in late 2020.
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In September 2017, PCCA and the U.S. Army Corps of Engineers executed a project partnership agreement to deepen and widen the Corpus Christi Ship Channel. The Channel Improvement Plan is scheduled for completion by 2022. In March 2018, PCCA leased 55 acres of land in the Inner Harbor to CCI Corpus Christi Infrastructure LLC, which will construct and operate a marine terminal facility for export of crude oil, condensate and refined petroleum products. Dredging and construction costs are not available.
Magellan Midstream Partners LP also is considering a crude-oil export terminal for VLCCs on Harbor Island. In early November, the company said the potential project would be part of a proposal to construct a crude-oil pipeline to the Corpus Christi area from Houston. But the company warned that “considerable time” would be required before a final decision is made.
Swiss commodity trader Trafigura also has filed plans for an offshore VLCC loading facility off Padre Island, Texas, but has not revealed the schedule or cost.
Rather than wait for pipeline capacity to be expanded to deliver crude to an export terminal, MMEX Resources Corp. is constructing the first phase of a planned 100,000-barrels-per-day refinery in the Permian Basin. Blanchard Industrial LLC has been named EPC contractor for MMEX’s Pecos County Crude Distillation Unit refinery near Fort Stockton, Texas. The distillation unit, scheduled for completion in 12 to 15 months, will produce nearly 10,000 bbl per day of low-octane naphtha, diesel and residual fuels, earning early cash flow while permitting the project’s second phase, which could take six months longer, company officials say. Costs and schedules for the project are not currently available.
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Several companies are also seeking to export the nation’s plentiful natural gas. The Federal Energy Regulatory Commission has approved five export terminals for liquefied natural gas that are under construction. Four others have been approved but are not under construction, and another 18 have been proposed to FERC or are in the pre-filing stage.
Tellurian is developing one, Driftwood LNG, near Lake Charles, La., that aims to lower LNG costs by integrating ownership of the Permian and Haynesville Shale leases, three pipelines totaling 873 miles and the 1,000-acre liquefaction plant. The company expects approval of the project’s Final Environmental Impact Statement from FERC in January. “Our target is to receive our FERC order, commercialize, take FID and begin construction the first half of 2019,” says Joi Lecznar, spokeswoman.
Bechtel has a $15.2-billion lump-sum EPC contract for the 27.6-tonnes-per-annum plant. The Driftwood plant will have as many as 20 LNG trains and three storage tanks, with 235,000 cu meters capacity each. Operation is scheduled in 2023.
