Unique: Environmental evaluation may delay Carlyle deepwater oil export challenge as much as 18 months

Exclusive: Environmental review could delay Carlyle deepwater oil export project up to 18 months

By Collin Eaton

HOUSTON (Reuters) – A Carlyle Group $1 billion deepwater crude export challenge faces a delay of as much as 18 months after regulators referred to as for a full environmental evaluation, officers stated, a setback within the non-public fairness agency’s race to be first to open a brand new deepwater, U.S. Gulf Coast export hub.

Carlyle and commodities dealer Trafigura AG are vying to open the primary Texas port in Corpus Christi that may totally load supertankers. Carlyle has partnered with the port for a dredging challenge that might allow it to totally load supertankers able to carrying 2 million barrels of oil to locations worldwide. Trafigura has proposed an offshore port, which requires no dredging and a much less in depth allowing course of.

The U.S. shale growth has prompted a surge in oil exports, upending international provide and sparking a race to construct infrastructure that may deal with these vessels. Exports not too long ago hit a document three.6 million barrels a day and will maintain rising. The U.S. Power Division has projected that home output will exceed 13 million bpd by 2020.

At present, U.S. export capabilities are constrained as a result of the U.S. Gulf, which handles most oil exports, solely has one port, positioned in Louisiana, deep sufficient to totally load these vessels with out resorting to costly ship-to-ship transfers in deeper waters.

The U.S. Military Corps of Engineers, which points permits for dredging tasks, has really useful a full environmental impression assertion (EIS) for Carlyle’s challenge to dredge the ship channel to a depth of 75 toes, Port of Corpus Christi Authority Chief Government Sean Strawbridge stated in an interview on the sidelines of the CERAWeek vitality convention in Houston.

“They took the place that it is higher to do an EIS,” Strawbridge stated referring to the lengthier, full evaluation. “We all know with 100 p.c certainty it isn’t going to take longer than 24 months.”

The Carlyle group had sought to finish a shorter evaluation, referred to as an environmental evaluation, which might take as little as just a few months, citing the dredging challenge’s similarity to an earlier proposal that had undergone a full evaluation.

The total evaluation may push again by 18 months till early 2022 Carlyle’s plan to develop a pathway for totally loaded supertankers, Strawbridge stated. The ability will start partially loading these vessels late subsequent yr, utilizing smaller tankers to finish loading at sea, a course of referred to as reverse lightering used at a number of areas alongside the U.S. Gulf.

Mark Williford, a spokesman for the Military Corps, wouldn’t affirm whether or not it had really useful a full EIS for the challenge.

Carlyle stays dedicated to the challenge, expects to start partially loading tankers on its unique 2020 schedule and can have the ability to totally load by the third quarter of 2021, stated Ferris Hussein, a Carlyle managing director.

It nonetheless hopes to persuade regulators to streamline the environmental evaluation and believes the dredging wanted may very well be accomplished in six to eight months after permits are acquired. Carlyle faces contract penalties whether it is unable to totally load supertankers at its dock by late 2021.

“The EIS hasn’t modified our improvement plans. We’ve got had inside discussions about ‘can we wish to amend our agreements with shippers?’ and we stated ‘no, we are able to make it,'” stated Hussein. “All the pieces continues to be on time.”

Trafigura has proposed a deep water port 13 miles off the Texas coast. Offshore tasks face totally different rules and a shorter evaluation course of. It has stated its export port may very well be working by mid-2021.

The Port of Corpus Christi Authority, Carlyle’s associate, is proposing to dredge its ship channel to a depth of 75 toes from 47 toes now. That will enable the loading of supertankers carrying as much as 2 million barrels of oil to Asia, Latin America and Europe from a dock on a harbor island.

Corpus Christi’s port shipped about 710,000 bpd in December, in line with public information.

[For a graphic on U.S. oil production topping Russia and Saudi Arabia, see: https://tmsnrt.rs/2R69s7G]

Strawbridge stated the companions hope to shorten the onshore challenge’s 24-month evaluation by at the least six months by interesting to the Federal Allowing Enchancment Steering Council, a Trump administration effort to hurry regulatory selections on infrastructure.

Alex Herrgott, govt director of the steering council, declined to remark, a spokeswoman for the council stated.

(Reporting by Collin Eaton in Houston; Modifying by David Gregorio)

This story has not been edited by Firstpost workers and is generated by auto-feed.

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