Westway Terminals is positioning itself to take full advantage of another market shift instigated by the shale revolution
While the shale revolution has sparked a surge in the energy market for all things oil it has also instigated another lesser known shift – the
It is this revolution that Westway Terminals is working to be well-positioned to take advantage of.
The storage operator currently has 15 terminals across North America – 14 in the US and one in Canada and each has the flexibility and potential to expand according to its niche customer demand and optimising the long term implications of the shale revolution.
Geoff Roberts, chairman of the board at the New Orleans-based company explains that petrochemical production in the Gulf Coast
will continue to grow and will create long-term investment in the sector.
‘We look less at the short-term trends and take a more long-term trend approach.
‘As more and more of the market starts to understand the significance of the shale revolution, many competitors want to pursue opportunities on the crude side,’ he says.
‘There is a tremendous availability of crude oil and natural gas which will create long-term investment in petrochemicals – that is where we want to focus.
‘There is a lot of value in these small, niche plays.’
This market focus has been the driving force behind a multi-phase project in Houston, Texas to construct a petrochemical hub. An additional 300,000 barrels of capacity has been added, bringing the total capacity to more than three million barrels. Over the next three years Westway is planning to add approximately 350,000 barrels of additional capacity to the hub. High value products are the focus of the expansion such as biodiesel, acids and fertilisers in addition to other specialty chemicals.
‘Westway was built around molasses and animal feeds,’ Roberts says. ‘We are now looking to bring high value services and capacity to high value products. These include petrochemicals and base oils.
‘We also see some opportunity for an additional petrochemical hub in the mid-continent and it will be very interesting to see how the market plays out for this.’
At its terminal facility in Philadelphia in Pennsylvania, Westway upgraded their ageing tanks and re-configured their capacity to add an additional 10 million gallons of capacity. The addition of 11 new tanks – nine carbon and two stainless steel – brought the total capacity to 23 million gallons.
Improved tank functionality has also significantly reduced tank truck time turnaround at the facility from 40 minutes to 20 minutes.
Capacity at the facility has almost sold out and this is, according to Roberts, largely due to being more flexible and responsive to customer needs.
‘We want to be very much customer driven and base our business model and future expansion projects around the needs of our customer
‘For example in Iowa our customers have been asking for increased rail capacity so we are in the process of building a substantial rail expansion – driven by our customers needs.’
Elsewhere, at the company’s Grays Harbor facility in Washington a crude-by-rail facility will not only increase rail capacity but will also add between 400,000 to one million barrels of additional capacity. Due to regulatory restrictions, the facility will have an average throughput of 50,000 barrels
‘We have similar projects at every one of our terminals – all of them have expansion possibilities,’ explains Roberts.
‘We are looking to add somewhere between 600,000 to 700,000 barrels of additional capacity across the board over the next three years.’
Looking ahead the future looks bright for the bulk liquid storage industry and the promise and delivery of investment continues.
‘Fundamentally the market is growing,’ explains Roberts.
‘There is going to be a lot of downstream investment going forward as the shale revolution plays out.
‘This is an amazing opportunity for us to cater to high service customers who have more demanding requirements.’