Petrochemical production fuels a bright storage future

Petrochemical production fuels a bright storage future

The US Gulf Coast is a hub of petrochemical activity and with production expected to increase over the coming years, the demand for storage will also benefit. Stolthaven New Orleans explains more about how it is positioning itself to capitalise on these favourable market conditions

The US Gulf Coast is an excellent example of how the country’s shale oil revolution is boosting production output for energy product markets and increasing the need for more supply chain infrastructure. Earlier this year, the International Energy Agency projected that on the back of booming US energy economics, the country will become an ‘undisputed world leader in oil & gas production’. 

This increase in petrochemical production is fuelling significant demand for storage in key production regions. A good portion of this production capacity is being added in Louisiana, which makes the New Orleans area an attractive option for storage. Stolthaven New Orleans is strategically located on the 80th mile marker in the Mississippi River and it is the independent terminal closest to the mouth of the river. With 2.1 million barrels (334,869 m3) of storage spread over 85 tanks, the facility is used for exports and imports as well as domestic distribution.
In an interview with Tank Storage Magazine, general manager Captain Philip Watt says that the facility’s location is ideally suited to capitalise on current and new production levels as well as provide a more attractive delivery point.

Philip says: ‘Working with our sister terminal, Stolthaven Houston, we know that storage is very tight in the Houston area and many of our competitors in Houston are facing significant waiting time at their berths, which is why we have expanded the barge dock and are in the process of adding a new deep-sea dock in Houston. However, we have noticed that an increasing number of importers/exporters consider the Mississippi River as a viable option, also when the origin of or the end destination for the product is located in the Houston area or further west in the country. ‘The vessels ETAs are more reliable in the Mississippi River, which assists with inventory planning and, together with the reduced demurrage exposure, this results in savings that offset part of the additional cost in terms of land transportation.’

He explains that being located close to the mouth of the river provides other competitive advantages. ‘There are additional costs involved for shipowners when they call at terminals located further upriver in terms of additional steaming time and pilot costs, and many shipowners charge additional freight to call further upriver accordingly. ‘Our berth waiting time is significantly lower than at other terminals in the US Gulf Coast, especially compared to some of our competitors’ terminals in the Houston area.’ Despite being located in an area that is exposed to hurricanes and other weather-related hazards, the infrastructure built around the terminal protects it from flooding or other storm damage. Its strategic location also means the facility does not have any issues with high river levels. ‘In fact, during high river, when vessels may be restricted from calling other terminals upriver, our facility is often used for transloading from vessel to barges through our shoreloop.’

LEVERAGING SYNERGIES

In addition to its favourable location, the facility also successfully leverages other Stolt businesses to give customers more added value. ‘We work hard to keep short turnaround times at our berths, regardless of the vessel. However, the operations manager at Stolthaven New Orleans is also the port operations manager for Stolt Tankers in the Mississippi River, which further facilitates a proactive approach in order to expedite turnaround times and minimise the exposure to delays when Stolt Tankers call. ‘Stolt Tankers also have a good number of calls to our terminal each year, which translates into a cost-efficient option for our customers when they look to import to or export from our terminal. We regularly receive feedback from customers that they value the advantages of using the same service provider for freight and storage.’ Additionally, the facility is served by an excellent rail connection by Norfolk Southern to the gate of the terminal, which means that customers do not need to contract with a short line when utilising storage at the facility.

A BRIGHT FUTURE

There is ample room for the facility to double its capacity within the flood wall if required and there is additional land outside the wall that could be used for storage and rail storage. ‘We have great scope to expand when there is enough demand to support it,’ says Watt. ‘We are very excited about the increased demand for storage in our region and we feel we are well positioned to meet customers’ needs. ‘Our ambition is to be the number one option in the region when producers, importers and traders look for a partner to manage their supply chain. We believe the future is bright for Stolthaven New Orleans.’

"We are excited about the increased demand for storage in our region & we feel we are well positioned to meet customers’ needs"