Port of Corpus Christi Authority, Carlyle Group enter agreement to develop crude oil export terminal on Harbor Island

Published on November 01, 2018 by Kevin Randolph

The Port of Corpus Christi Authority (the “Port”) announced this week that it entered into an agreement with the Carlyle Group to develop a crude oil export terminal on Harbor Island to connect growing crude oil production in the United States with global markets.

The terminal would be the first onshore location in the United States capable of providing export service to fully-laden Very Large Crude Carriers (VLCCs).

The new terminal could produce up to a $50 billion annual reduction to the national trade deficit and would create thousands of direct and indirect jobs, and billions in incremental economic activity, the Port of Corpus Christi said in a news release.

“A project of this magnitude further underscores the vital role the Port of Corpus Christi plays in the global energy markets and as an important economic generator for the great state of Texas,” Sean Strawbridge, CEO of the Port of Corpus Christi, said. “In partnering with such an experienced and well-capitalized firm as The Carlyle Group, the market should take notice and have a high degree of confidence of this project’s success.”

Under the agreement, the port will work exclusively with the Carlyle Group, which will lead the construction and operations of the terminal. Carlyle will also arrange for a private funding solution for a dredging project.

Construction will not require capital outlay from local taxpayers. The port will receive, under the agreement, regular rental payments, volume-based tariff income, land grants, and other proceeds.

The project will include the development of at least two loading docks on Harbor Island and crude oil tank storage inland across Redfish Bay on land secured by Carlyle.

The Project is subject to agreement on definitive documentation between the parties, satisfactory completion of due diligence and final approval from Carlyle’s investment committee. The Terminal is expected to be operational in late 2020.