Corpus port now awash in oil-related business
Jennifer Hiller, Staff Writer
Nov. 9, 2013 Updated: Nov. 9, 2013 11:44 p.m.
1of30Steven Schmidt, right, Terminal Manager of NuStar in Port Corpus Christi, talks with Greg Matula, also of NuStar, at the contraction site of the new pier for oil tankers. Monday, Oct. 28, 2013.Bob Owen/San Antonio Express-NewsShow MoreShow Less
2of30Tanks for oil storage are located near the port.Photos byShow MoreShow Less
3of30Two pelicans watch for fish in the Port Corpus Christi Shipping Channel where the US Naval Ship Benavidez is docked. Monday, Oct. 28, 2013.Bob Owen/San Antonio Express-NewsShow MoreShow Less
4of30This refinery, a landmark on the Corpus Christi skyline, is near the port. Show MoreShow Less
5of30Construction work at the Site of Nueces River Rail Yard which will tie into Port Corpus Christi. Monday, Oct. 28, 2013.Bob Owen/San Antonio Express-NewsShow MoreShow Less
6of30A man rest with his feet propped up at a picnic table on North Beach in Corpus Christi, Monday, Oct. 28, 2013, as a full tanker ship makes its' way to the shipping channel of Port Corpus Christi where the Eagle Ford Consortium is running Oct. 28 through Oct. 30.Bob Owen/San Antonio Express-NewsShow MoreShow Less
7of30Wind turbine blades made in the U.S. wait to be shipped as an oil tanker passes by in Port Corpus Christi. Monday, Oct. 28, 2013.Bob Owen/San Antonio Express-NewsShow MoreShow Less
8of30A wind turbine blade is loaded for transport in Port Corpus Christi. Monday, Oct. 28, 2013.Bob Owen/San Antonio Express-NewsShow MoreShow Less
9of30Ships and barges hug the shoreline at the Port Corpus Christi, in Corpus Christi, where the Eagle Ford Consortium is meeting through Wednesday. Monday, Oct. 28, 2013.Bob Owen/San Antonio Express-NewsShow MoreShow Less
10of30Ships unloading in Port Corpus Christi in the shipping channel. Monday, Oct. 28, 2013. The Energy Information Administration soon will issue a report analyzing how the price of oil around the globe affects U.S. gasoline costs. The document is expected to provide ammunition to export advocates, who have argued that the existing ban is a relic of the OPEC oil embargo that does not mesh with today's booming domestic crude production.Bob Owen/San Antonio Express-NewsShow MoreShow Less
11of30Large mounds of sulfer, a byproduct of refining, sits in a lot in Port Corpus Christi. Monday, Oct. 28, 2013.Bob Owen/San Antonio Express-NewsShow MoreShow Less
12of30Three of the four crude oil storage tanks that hold 400,000 barrels at NuStar Energy Terminal at the Port Corpus Christi where the Eagle Ford Consortium is meeting through Wednesday.Bob Owen/San Antonio Express-NewsShow MoreShow Less
13of30A tug boat pushes a barge for oil in the shipping channel past a military transport ship at the Port Corpus Christi where the Eagle Ford Consortium is meeting through Wednesday. Monday, Oct. 28, 2013. At right is construction on the new NuStar dock.Bob Owen/San Antonio Express-NewsShow MoreShow Less
14of30The Port Corpus Christi, where the Eagle Ford Consortium is meeting through Wednesday, is seeing an increase in activity due to the oil and gas production from the Eagle Ford. Monday, Oct. 28, 2013.Bob Owen/San Antonio Express-NewsShow MoreShow Less
15of30The USS Lexington near the Harbor Bridge, the opening to Port Corpus Christi. Monday, Oct. 28, 2013.Bob Owen/San Antonio Express-NewsShow MoreShow Less
16of30Tugs push an oil barge out of the Port Corpus Christi , in Corpus Christi where the Eagle Ford Consortium is meeting through Wednesday. Monday, Oct. 28, 2013.Bob Owen/San Antonio Express-NewsShow MoreShow Less
17of30An oil tanker waits to enter Port Corpus Christi. Monday, Oct. 28, 2013.Bob Owen/San Antonio Express-NewsShow MoreShow Less
18of30Construction of the NuStar Oil docking pier in Port Corpus Christi. Monday, Oct. 28, 2013.Bob Owen/San Antonio Express-NewsShow MoreShow Less
19of30Dredging operations at the La Quinta Channel expansion at Ingleside, TX. Monday, Oct. 28, 2013.Bob Owen/San Antonio Express-NewsShow MoreShow Less
20of30New housing in Portland, TX. Monday, Oct. 28, 2013.Bob Owen/San Antonio Express-NewsShow MoreShow Less
21of30Wind turbines in the Papalote Creek Wind Farm near Taft, TX. Monday, Oct. 28, 2013.Bob Owen/San Antonio Express-NewsShow MoreShow Less
Downtown Corpus Christi near Port Corpus Christi where the Eagle Ford Consortium is meeting through Wednesday. . Monday, Oct. 28, 2013.
Bob Owen/San Antonio Express-NewsShow MoreShow Less
23of30Jose Martinez uses a sand blaster preparing to paint oil pipelines at the new NuStar Terminal in Port Corpus Christi. Monday, Oct. 28, 2013.Bob Owen/San Antonio Express-NewsShow MoreShow Less
24of30The Corpus Christi skyline looms behind oil refineries next to Port Corpus Christi. Monday, Oct. 28, 2013. In a letter to President Barack Obama, refining executives stressed that final quotas for renewable fuel should give them enough room to keep producing ethanol-free gasoline for boaters, motorcyclists and old car enthusiasts who demand the product. They warned that if the administration gives in to Corn Belt demands for higher mandates, it could cause gasoline prices to spike.Bob Owen/San Antonio Express-NewsShow MoreShow Less
25of30Large mounds of sulfer, right, and coke, left, byproduct of refining, sit in lots in Port Corpus Christi. Monday, Oct. 28, 2013.Bob Owen/San Antonio Express-NewsShow MoreShow Less
26of30Oil storage tanks next to Port Corpus Christi. Monday, Oct. 28, 2013.Bob Owen/San Antonio Express-NewsShow MoreShow Less
27of30Refineries in Corpus Christi, TX with Port Corpus Christi at left, Monday, Oct. 28, 2013.Bob Owen/San Antonio Express-NewsShow MoreShow Less
28of30Corpus Christi Marina. Monday, Oct. 28, 2013.Bob Owen/San Antonio Express-NewsShow MoreShow Less
29of30A shrimping boat passes a oil barge after leaving Port Corpus Christi. Monday, Oct. 28, 2013.Bob Owen/San Antonio Express-NewsShow MoreShow Less
30of30The USS Lexington in front of the Harbor Bridge and Port Corpus Christi, Corpus Christi, TX. Monday, Oct. 28, 2013.Bob Owen/San Antonio Express-NewsShow MoreShow Less
CORPUS CHRISTI — At Oil Dock 1, a tanker fills with 325,000 barrels of crude oil.
"See the Golden State over there," says Steven Schmidt, pointing to the green, white and red tanker. "That's what we want to bring in here all the time. With our new pumps, we'll be able to fill that in a day."
Schmidt, the terminal manager for NuStar Energy LP, stands at the windy edge of his own construction site, where NuStar recently finished a 41-foot dredge for its new oil dock, with the goal of moving more Eagle Ford Shale crude oil faster. The demand is obvious.
Another seven vessels wait in line behind the Golden State, anchored beyond the jetty in Port Aransas about 2 miles out in the Gulf of Mexico.
It's a Monday afternoon at the edge of Texas, but this might as well be the center of the oil field.
Although the Port of Corpus Christi moves everything from enormous wind turbine blades to military equipment, the Eagle Ford to its north and the field's various and sundry products — from steel pipe to sand — seem to touch everything here these days.
The drilling boom has launched billions of dollars in port construction projects, as well as a round-the-clock frenzy to move products in and out of the oil patch, and to coastal terminals and refineries.
There are warehouses filled with bulk bags of ceramic proppant, the perfectly spherical sand-size beads used in hydraulic fracturing. Tug boats push inland, and oceangoing barges carrying crude oil. Steel oil-field pipe from South Korea sits stacked near a cargo dock. Workers build new storage tanks. Construction cranes punctuate the sky.
The only vessels that seem to be bringing oil into this port are heading to the Citgo refinery, owned by the national oil company of Venezuela, a country with plenty of its own hydrocarbons.
"Pretty much everything else is moving out," said Jesse Samu, a spokesman with the port.
Starting this summer, more crude oil left Corpus Christi for other U.S. ports and Canada than foreign oil arrived — a reversal no one saw coming.
There are other turnarounds. After years of outmigration, Jim Lee, professor of economics at Texas A&M University-Corpus Christi, said the city — and especially its port and refineries — has found luck in geography, and an influx of jobs and activity.
About 70 miles to the north, the massive Eagle Ford arcs across South Texas like a crooked smile. It's now one of the world's most profitable oil fields.
"Corpus Christi was considered at a disadvantage. We're at the dead end. You drive south from San Antonio and you hit the waterfront and it's the end," Lee said. "Now it's totally the other way around."
A map of the port, which includes land in Nueces and San Patricio counties, looks like an industrial Monopoly board. There's construction of a $45.8 million rail yard and $35 million in upgrades to public barge and dock facilities. But the other projects along the ship channel in Corpus Christi, Portland and Ingleside have more spectacular numbers.
Land on this rectangle and it's a $500 million construction project. Over there is a $1 billion investment.
"It sounds like I'm just making numbers up," Port of Corpus Christi Executive Director John LaRue said. "I'm not."
China-based Tianjin Pipe Corp., called TPCO, is building a $1.3 billion plant to manufacture oil-and-gas pipe.
A subsidiary of Switzerland-based Trafigura AG is spending $500 million to build crude-oil and natural-gas storage tanks and docks.
Cheniere Energy plans a $10 billion plant to liquefy natural gas and sell it abroad.
Abudi Zein, co-founder and CEO of ClipperData, which tracks deliveries to coastal refineries and terminals, said shale drilling has upended the midstream industry, the part of the oil and gas business that deals with transportation and storage.
"It's disrupting all the patterns. The import patterns are different. The way the refineries are run are different," Zein said. "The Port (of Corpus Christi), from a commodities point of view, has been a place where you're unloading crude oil, you're unloading products. It developed into an exporting port."
San Antonio-based NuStar is moving 200,000 barrels per day of Eagle Ford crude oil and wants to increase that to 490,000 barrels daily by 2017.
President and CEO Curt Anastasio said the company had the advantage of existing terminals and pipelines in South Texas, and exploited it.
"Corpus Christi is the most important location in our system, and it will continue to be," he said.
"We had a lot of assets already on the ground ready to go to accommodate this new production. We just had to repurpose them. Maybe they used to move gasoline. Now they're going to move crude oil. We had to change the direction of some of these. Maybe they used to move south to north, now they're going to move north to south."
Zein said many thought that, as more Eagle Ford pipelines have come into service, the shipment of crude oil from Corpus Christi would dip. But that hasn't happened.
The shipment of crude oil out of Corpus Christi has increased right along with rising production numbers in the oil field. The Eagle Ford is expected to cross the 1 million barrel mark for daily crude oil production sometime next year.
Most of the crude oil leaving Corpus Christi is going to ports in Morgan City, La., which received 4.2 million barrels in August. Houston received 2.3 million barrels that month. Beaumont, Freeport and Texas City also received more than 1 million barrels, according to ClipperData.
About a third of the crude oil leaving Corpus Christi goes by barge, steel vessels pushed by tugs on the Intracoastal Waterway.
"It's an economic decision," Zein said. "This is the cheapest way to do things."
While pipelines are considered the cheapest and safest ways to transport hydrocarbons, they take time to build. Trucking is the most expensive option. So rail and barge have emerged as a middle road for the midstream industry.
Between 2011 and 2012, the amount of crude oil moved on barges increased 53 percent, according to the Institute for Energy Research. Rail deliveries quadrupled.
But Corpus Christi suffered a long hangover in the wake of the 1980s oil bust and is trying not to forget its efforts to branch out beyond oil.
To diversify its port property beyond refining and oil shipments, it courted cruise ships. It added a minor league baseball park, Whataburger Field, and a meeting and banquet facility, the Ortiz Center, both with views of the ship channel and Harbor Bridge.
"The whole port has changed," Schmidt said. "They struggled forever trying to figure out what would be the base of the port. What's the mix? Now I think they struggle a little bit with everything having to do with oil. They're afraid that might dry up. They don't want to lose all of the cargo space for oil storage."
Lee said everyone seems to have the 1980s on their mind.
"Everything is expanding all the time. I'm worried," Lee said. The recent surge at the port started with $80 oil. "If it goes down to $80 or $70, what is going to happen?"
Not all about oil
Several of the companies building or planning facilities at the port have nothing to do with oil and gas — although they will benefit from the historically low price of natural gas coming from U.S. shale gas fields.
The Italian chemical engineering and manufacturing company M&G Group is in the permitting stage for a $1.3 billion plant for PET resin, the clear plastic used in water bottles.
Voestalpine, based in Austria, plans a $700 million plant on the north shore of Corpus Christi Bay to import iron ore from Brazil and possibly Canada and Minnesota to make briquettes that will be shipped to European auto plants.
But Lee worries shale overshadows everything else.
"It took us years to think about, 'What else can we do other than oil?' Now we forgot all about it," Lee said.
The Sierra Club Coastal Bend Group also is looking at the cumulative effect of all of the port projects, because "while one project by itself may be neutral, the combination of several may be harmful," Chairwoman Lois Huff said by email.
"Another personal concern I have is that the risk of oil spills is increasing along with the increase in oil being shipped out, and I am not sure we are doing enough to let the Coast Guard and the port and the shippers know that they are accountable not only to the agencies that permit them, but to our coastal community and to our coastal environment."
Corpus Christi's first dredged its ship channel in the 1870s to export agricultural products, but by the 1930s the abundance of nearby oil became transformational. Deepwater docks were dredged and the refining industry anchored itself along the shores of Nueces Bay.
As Texas and other U.S. domestic oil production fell off as the decades went by, local refineries started importing oil instead.
"This is our second time around," Mike Carrell, port chairman, said at a recent Eagle Ford event.
The port is watching to see if Mexico will open its vast oil and gas fields to foreign investment.
"We're as close to Monterrey, Mexico, as we are to Dallas, Texas," La Rue said. "For our future, that's a tremendous possibility."
The Panama Canal expansion project could provide more business.
"A lot of communities throughout the United States are talking about the Panama. They're talking about imports. They're talking about bringing clothes and TVs," LaRue said. "The opportunity we see for Texas with the Panama Canal is all exports."
Corpus Christi already had one of the country's busiest ports prior to the Eagle Ford.
Officials weren't paying much attention to the chatter about the new oil and gas field back in 2008 and 2009 when drilling started.
"At first, we didn't know what had happened. The first thing for me was frac sand," LaRue said.
Hydraulic fracturing pumps a mix of water and chemicals at high pressure to break the shale. Then sand — lots of it — is added to the fluid in increasing amounts to hold open the rock fissures, letting oil and gas flow up the well to the surface.
Suddenly, companies wanted space to offload and store sand in Corpus Christi. LaRue's initial response: "We've got plenty of sand here."
But this sand was coming from Minnesota and Wisconsin, and was heading to "a place called the Eagle Ford. You know the rest of the story."
Now tons of sand, ceramic proppant and barite, used to thicken drilling mud, move through the port.
On a Monday afternoon at a bulk unloading dock, the claw of a gantry crane glided between the carrier Cielo Di Amalfi and a shoot at an unloading dock, dropping load after load of barite from India.
Trucks pulled up one at a time, reversed to scoot into the proper position, and idled while the shoot opened and barite fell into the trucks' open hoppers.
The deafening commotion sounded like popcorn, rattling and crashing in rapid fire.
But the eruption lasted just three minutes. One truck drove off to the oil field. Another replaced it within seconds.
Express-News archives contributed to this report.
jhiller@express-news.net
Twitter: @Jennifer_Hiller
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Jennifer Hiller
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Jennifer Hiller covers the Eagle Ford Shale, the massive oil and gas field in South Texas. She previously covered real estate, development and architecture for the Express-News. Jennifer has worked at several newspapers across Texas, as well as at the Honolulu Advertiser and Arkansas Democrat-Gazette. She's a Houston native and a graduate of the University of Texas at Austin, where she received a degree in journalism.