Offshore terminal planned with Phillips 66, ending dispute between Corpus, Trafigura

Houston-based Phillips 66 (NYSE: PSX) and Singapore-based Trafigura Group Pte. Ltd announced a joint venture Feb. 28 to build a terminal capable of loading very large crude carriers off the coast of Corpus Christi, Texas.

The two companies are awaiting permitting for the project, known as Bluewater Texas Terminal LLC, and plan to make a final investment decision later this year. Bluewater will consist of up to two single-point mooring buoys capable of loading VLCCs — massive oil tankers that can carry 2 million barrels per trip.

The project replaces a previous proposition by Trafigura to build a single mooring buoy under a venture called Texas Gulf Coast Terminals. On Feb. 28, Trafigura announced that it had withdrawn its application with United States Maritime Administration to permit that project, which would have been near the Padre Island National Seashore.

The Bluewater buoys will be placed 21 nautical miles, or 24 land miles, from the Port of Corpus Christi, according to the companies. It will sit farther out north to sea than the previously proposed Trafigura project.

The new location is one of the reasons that the Port of Corpus Christi is throwing its support behind the Bluewater project despite its objections to Trafigura’s discontinued Texas Gulf Coast terminal, port CEO Sean Strawbridge told the Business Journal. Sitting the buoys further offshore will help protect Corpus from emissions, he said.

The port was also happy with Phillips 66’s inclusion in the new project as the company has for decades run a similar crude terminal off the east coast of England.

“I’ve been there along with some board to see it and have them explain it to us,” Strawbridge said. “We got a better understanding and a higher level of comfort for what they are and how they’re operated speaks volumes to [Phillips’] ability to do this safely and responsibly.”

Although the terms of the contract are still being hammered out, Bluewater has agreed to lease land from the port to place a booster station for the offshore terminal, according to Strawbridge. That means money going back to the community, whereas the old Trafigura project wasn’t planning on leasing land on from the port.

The land being leased for the Bluewater booster station is on Harbor Island, the site of another proposed VLCC docking station.

Homeowners in Port Aransas have pushed back against construction on Harbor Island, which is separated from Port Aransas by the same waterway the port wants to dredge for the VLCC terminal.