Max Midstream, a Texas, US-based energy company, has bought the Seahawk Pipeline and Terminal at the Port of Calhoun, Texas, from Oaktree Capital, and plans to build a new pipeline to the site, with a view to transforming Calhoun into an alternative to Houston and Corpus Christi for oil exporters.
The new pipeline will connect the Port of Calhoun directly with the Eagle Ford and Permian basins, and will transport up to 20 million bbl of oil a month. Max Midstream also plans to upgrade the Seahawk export terminal facilities at the port and at the Edna pipeline interconnection terminal in Texas. The company expect to begin exports when first phase of development is expected by the end of 2020. A second phase of development will be completed in 2023. Max Midstream will invest up to US$1 billion (€858.6 million). The development work is expected to create 1,000 jobs.
Todd Edwards, president of Max Midstream, says that the company will have built 1.5 million bbl of storage at Edna and 600,000 bbl of storage at Seahawk by the end of November 2020. Following the second phase of development, Edna will have a total capacity of 9 million bbl, and Seahawk will have a total capacity of 6 million bbl. The port will have nine 16” loading arms and three 8” barge loading arms.
Max Midstream says that its plans are a ‘game-changer’ for Texas oil, which is usually exported through the ports at Houston or Corpus Christi, which are generally at or near full capacity. The development of the new pipeline will give exporters a third option with the Port of Calhoun. The company has agreements in place for three pipeline interconnects, one with Kinder Morgan Crude and Condensate, one to the Gray Oak, and one to the Victoria Express, allowing for the direct exports from the Eagle Ford and Permian basins. The existing Seahawk pipeline connects the Kinder Morgan Crude and Condensate Interconnect in Edna, Texas to the Seahawk terminal.
‘By developing the Seahawk Terminal at the port, we will be able to offer a deep-water terminal with little congestion and the ability for producers to get their product to the port at a very reasonable price,’ says Edwards.
Max Midstream and the Calhoun Port Authority have signed a public-private partnership for the development, whereby Max Midstream will invest US$360 million to finance the deepening and widening of the port by 2030. Until then, Max Midstream will load Panamax ships and reverse lighter to larger ships such as very large crude carriers (VLCCs). When the port works are complete, the company will be able to directly load Aframax and Suezmax ships, which it says will make the Port of Calhoun a viable alternative to Houston and Corpus Christi.
‘We, the Calhoun Port Authority, could not be more excited about this project,’ says Charles R. Hausmann, Calhoun port director. ‘This will transform our port into a major oil exporting centre, and it will transform our area with new jobs and new growth. This is an exciting day for the Port, the community and the state of Texas.’
Additionally, SGS Oil, Gas and Chemicals will provide expertise on supply chain management, metering and custody transfer and management solutions. Work will also include overseeing the design of laboratories at the Seahawk and Edna terminals, and designing crude blends that are stable and compatible with other international crude oils. Max Midstream says that it is the only independent group that has designed its pipelines and storage to accomplish this.