Houston ship channel as important as the Straights of Hormuz in energy trade
U.S. oil-pipeline operator Enterprise Products Partners LP is irked that the Middle East’s Strait of Hormuz hogs the spotlight over the waterway that flows in its own backyard.The ship channel runs from Galveston Bay to Buffalo Bayou. It was dredged after the 1900 Galveston hurricane. The dredge material was used to raise the level of Galveston Island by about six feet. Over the years since then, it has been widened and deepened.
“In many respects, the Houston Ship Channel is now just as important as the Strait of Hormuz,” Chief Executive Office Jim Teague said Wednesday on a conference call with analysts. “Neither this country nor the world has ever fully understood or appreciated the importance of the Ship Channel, but the U.S. oil and gas and petrochemical industry is beginning to.”
Teague has good reason to talk up the Ship Channel: Enterprise has devoted more than $8 billion around it over the last five years, he said on the call. On July 30, the company announced deals with Chevron Corp. that will allow for the expansion of its system from the booming Permian shale basin to a terminal in Houston.
Those agreements also supported the investment decision to proceed with an oil terminal in the Gulf of Mexico. The terminal is dependent on a permit approval by the federal Maritime Administration, which will likely come in the second quarter of 2020, Randy Fowler, chief financial officer said on the call. Construction of the terminal will take “a couple of years,” Fowler said.
The Houston Ship Channel is home to the second-largest petrochemical complex in the world and is home to the second-busiest U.S. port by tonnage....