New Orleans, Charleston expand port services to capture petchems export growth
Plastics production growth on the U.S. Gulf Coast is driving major infrastructure and efficiency upgrades at the Port of New Orleans and the Port of Charleston as they are preparing to receive a larger share of the growing market for U.S. polyethylene exports, port authorities told Petrochemical Update.
“All of our discussions about our container growth potential have been very centered around the growth in plastics,” said Janine Moreau Mansour, deputy chief commercial officer at the Port of New Orleans, which is the closest major port to some 2.75 mtpa of ethylene capacity currently under construction in Louisiana.
New ethane cracker facilities and expansions on the Gulf Coast and in the Northeast are slated to add more than 11 mtpa of new ethylene capacity in 2016-2020.
The build-out will include about 6.5 mtpa of new downstream polyethylene capacity, mostly LLDPE and HDPE, according to Petrochemical Update estimates.
Excess North American polyethylene production available for export could be 2.7 – 4.1 mtpa through 2020, with Northwest Europe, Brazil, South Korea, and China offering the best export opportunities, based on regional demand-supply imbalances and U.S. total supply cost competitiveness.
Major ethane cracker projects (announced and under construction) in the U.S. and proposed new ethylene capacity by state. Click on and interact with the map to learn more. Source: Petrochemical Update.
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Port of New Orleans
Chemicals are now the largest containerized export commodity at the Port of New Orleans, which handled a total of 525,483 twenty-foot equivalent units (TEUs) of full and empty containers in 2015 – up more than 7% year on year – including 114,021 full TEUs of imports and 252,103 full TEUs of exports.
The growth was driven by a surge in exports of resins and other plastics produced in the region. The port anticipates further plastic resin export growth starting in 2017-2018, with some of its current shippers expecting to double their volumes, Mansour said.
Source: Port of New Orleans.
A planned $220 million expansion of the port’s container terminal will increase the size and capacity of the terminal to enable it to handle more than 1 million TEUs per year, up from its current capacity of 800,000 TEUs. In the last five years, the port has invested $67 million into a new railyard at the terminal, as well as two post-Panamax cranes and two new RTGs.
In March, the Port of New Orleans opened a new 160,000 TEU on-dock intermodal railyard, designed to push more container volumes to rail to take advantage of the port’s access to all six Class I railroads, and to take pressure off the port’s gate complex and improve truck turn times, Mansour said.
To help with the added chemical volumes from the Baton Rouge area and take trucks off regional roads, earlier in 2016 marine transportation company Seacor AMH LLC also launched a new weekly container-on-barge service on the Mississippi River to move exports from Baton Rouge to New Orleans with the added option to reposition empty equipment from inland points.
The service will allow shippers in the Baton Rouge area to pre-position empty 40-foot containers – a chronic shortage on the Gulf Coast – from Memphis, and ship loaded containers for export through New Orleans.
The container volumes moved by barge are currently averaging 150 containers per week but are growing (200 containers moved by barge is the equivalent of about 400 truck moves on the Interstate 10 (I-10) Highway between Baton Rouge and New Orleans). The capacity per tow is approximately 500 containers, however with more tows and barges the capacity has no cap, said Lori Louviere, commercial manager at the Port of New Orleans.
The container-on-barge service is also expected to free up capacity for additional gate moves through the port, she added.
The port, in conjunction with its regional planning commission, is also studying the feasibility of launching a rail shuttle to port industrial properties including TCI Packaging the port’s major packaging and logistics company, which is currently adding two packaging lines to facilitate nearly 600,000 metric tons of new polyethylene packaging capacity.
To improve turn times and gate efficiencies, the two container terminal operators at the port have also invested $4.5 million in new terminal operating systems, as well as new gate system software that has increased gate transactions by 25%, Louviere said. To increase its gate capacity, the port is also expanding out-gate capacity.
The port is also considering offering break bulk shipping options for petrochemical shippers. Ocean carrier Grieg Star has said it could offer break-bulk shipping options for plastic resins and PVC exports via the port in the future, but receivers’ interest in break-bulk is still low compared to container shipping, Mansour said.
Mansour anticipates interest in break-bulk services could take off when petrochemical production volumes on the Gulf Coast ramp up in 2017 and 2018.
Port of Charleston
With expected congestion at the Gulf’s busiest ports starting in 2017-2018, some polyethylene producers are looking at the next closest and lowest-cost export options in the southeast that offer a great deal of available empty containers, fast turnarounds, competitive ocean freight rates, high over-the-road and container weight allowances, as well as deep water levels that can handle bigger, more efficient ships.
The Port of Charleston is actively servicing more than a dozen plastic and resin importers, exporters and traders via the existing operations of Frontier Logistics, A&R Bulk-Pak, Mid-States Packaging, Premier Logistics and Wyse, and expects to add four more clients by October, said Paul McClintock, senior vice president, Sales & Marketing at the South Carolina Ports Authority (SCPA).
The Port of Charleston currently handles about 600 containers/month of petrochemicals export business from the Gulf, including by Chevron Phillips Chemical and Westlake. By 2020, port authorities expect to be handling at least 2,000 containers/month transloaded locally to markets in northern Europe, the east coast of South America, southeast Asia/China and Africa.
Resin/plastic volumes through the port over last year were 48,000 TEU, up 20% year on year. In 2015, Charleston handled a total of 1.97 million TEU of full and empty containers, up 10% from 2014.
The port is also importing about 150 containers of polypropylene from per week from Brazil and the Middle East. The port also handles ISOs, and Charleston has significant ISO transload and liquid bulk tank operations at the Odfjell and Kinder Morgan terminals, according to Byron Miller, SCPA’s director, Marketing & Sales.
Construction works at Charleston’s new Leatherman Terminal. Image credit: South Carolina Ports Authority.
SCPA is deepening the Charleston harbor from the current 45 feet to 52 feet, full post-Panamax depth by the end of 2019, and is building a new $1 billion, 280-acre container terminal that will add 50% to SCPA’s container capacity when it opens by the end of 2019. It also plans to open a new Intermodal Container Transfer Facility in 2018.
The leasing of industrial real estate for transloading facilities is also set to rise near Charleston on the back of the expected growth in export volumes.
In August, A&R Bulk-Pak opened the first phase – 80,000 square feet – of their planned 400,000-square-foot packaging facility close to the Port of Charleston. Between August and October, the facility will be handling polypropylene imports and Seabulk transloading for resin cars from the Gulf Coast. In October, the company will launch a new bagging line capable of processing 2,600 25 kg bags per hour.
Frontier Logistics is also expanding its Charleston operations with plans to add a 450,000-500,000-square-foot bagging service, pending a due diligence study and further negotiations.
Meanwhile, in July Mid-States Packaging, a packager with extensive experience in the Northeast U.S., began a 320,000-square-foot plastics operations, and plastics packager Wyse Logistics started operations in the port in June.