As demand for petrochemical and hydrocarbon storage supports further expansion & growth, Contanda Terminals talks more about how it is growing its midstream infrastructure in Houston with two construction projects
On the back of the US’ thriving petrochemical, renewables and hydrocarbon markets the storage sector – particularly along the Gulf Coast – has been enjoying a renaissance.
Since 2014, the shale oil revolution has gripped the country, and the results have pushed the US to become the undisputed world leader in oil and gas production as well as reviving the country’s chemical sector and trade flows.
Today, the supply of petrochemicals now outstrips domestic demand, creating increased export activity to locations across the globe. Several US-based chemical projects are coming online, with more in the pipeline, supporting the need for more supply chain infrastructure.
It is expected that by 2025, bulk liquid production in the US chemical industry will increase by 50 million metric tonnes, according to IHS Chemical. Additionally, the American Chemistry Council projects that by 2020 the industry will have sales of more than $1 trillion, with the export of chemicals linked to shale gas reaching $123 billion by 2030.
Against these favourable conditions, Houston-based Contanda Terminals is embarking on two development projects as part of its strategic plan to double its total storage capacity across its 14 US terminals.
In an interview with Tank Storage Magazine president and CEO G.R. ‘Jerry’ Cardillo explains how the company continues to develop storage infrastructure for the petrochemical and hydrocarbon markets.
‘The continued fracking of natural gas liquids and the emergence of a large number petrochemical projects, will continue for quite some time, and will continue to require liquid storage services.
‘Additionally, to our south is Mexico, which has enjoyed reform recently with the liberalisation of its energy market and has opened itself up to international markets.
’Both the demand for petrochemicals and the reforms in Mexico are strategic reasons to invest in our infrastructure.’
Recently, the company announced it will be building a new, large capacity storage terminal on the site of its Contanda Steel business, which it acquired in the fourth quarter of 2016. The terminal named Contanda Houston Jacintoport Terminal – will provide up to three million barrels of additional petrochemical, renewables and hydrocarbon storage.
The automated terminal will have a deep-water ship dock, two barge docks along with truck and rail infrastructure. Construction work is expected to begin in October and it is expected to be operational during the fourth quarter 2019. Work to upgrade the existing ship dock will ultimately support larger vessels with drafts of up to 40 feet.
‘We are transforming that site into a liquid bulk terminal and growing our footprint in Houston,’ explains Cardillo.
‘This project meets the growing needs of our customers to support their growth initiatives. The new terminal will strengthen our position as a leading storage provider in our growing, renewable, petrochemicals and hydrocarbons markets and allows us to continue our growth platform in and around the Houston Ship Channel.’
The expansion will add a third Houston-based storage facility to the company’s portfolio. Its Houston Manchester Terminal (formerly Houston 1) has 2.03 million barrels of storage across 92 tanks for speciality chemicals, acids, petroleum products, base oils, biodiesel and caustic soda. The Contanda Houston Magnolia Terminal (formerly Houston 2) is comprised of 58 tanks with a total capacity of 982,000 barrels of capacity.
Products stored include speciality chemicals, caustic soda, fertiliser, acid, petroleum products, base oils, biodiesel and glycols. Both of these terminals are reaching capacity, according to Cardillo.
‘This means that we need to continue our growth footprint further in Houston for long term customers.’
And the Contanda Houston Greens Bayou project will also add significantly to the company’s footprint in Houston. The 350-acre site was secured following a multi-year commercial agreement with the Port of Houston Authority and supports the growing petrochemical and refined products industries.
The facility will be built in phases and will provide access to onsite processing, multiple ship and barge docks and convenient tank truck and railcar accessibility.
It is expected to be operational in the first half of 2021. In addition to its activity in Houston, the company is also at various stages of development at two of its West Coast terminals.
‘The Gulf Coast is a very active one for us, particularly for hydrocarbon and petrochemical markets, and it has been part of our strategy all along to grow in to these markets. We are excited by the footprint and developments we have on the East and West Coast.
‘We are a fast-paced organisation and when I came on board in 2016 I said I wanted to double the size of the organisation in the next five years. All of these projects we are working on are all driven by the continued growth in demand for storage services and the flourishing markets in the Gulf Coast and Mexico.’