HOUSTON—Texas Deepwater Deer Park Terminal LLC (TDWP DP), a wholly owned subsidiary of Texas Deepwater Partners (TDWP) and an affiliate of USD Group LLC (USDG), has entered into a lease agreement with Equilon Enterprises LLC dba Shell Oil Products US (SOPUS) to retrofit and refurbish the Deer Park Rail Terminal (DPRT) to load refined products on the Houston Ship Channel. SOPUS affiliate Shell Trading (US) Co. (STUSCO) also entered into a related diesel supply agreement with an affiliate of USDG.
Upon completion of the project, the DPRT will have the capability of loading up to 48 railcars per day, or approximately 33,000 barrels of refined products per day. The facility is equipped with two operational tanks with 50,000 barrels of total storage capacity, which will service the railcar loading rack at the terminal with direct pipeline connectivity to Deer Park Refinery and the Colex Products Terminal.
The renovated terminal is expected to begin operations during second-quarter 2019, as one of the most advantaged and efficient rail loading terminals on the Houston Ship Channel. Following completion, TDWP DP will continue to lease and operate the DPRT facility under a long-term agreement with SOPUS. While the initial focus will be on loading diesel into railcars, there may be a potential to further expand the DPRT by adding incremental storage capacity and rail loading capabilities to handle additional refined products.
“This is an exciting opportunity to work jointly with TDWP to operationalize a long-idled asset as we continue to see diesel demand growth in many markets,” said Odeh Khoury, vice president, Shell Products Trading & Supply Americas. “This project further increases our integration with Shell’s Joint Venture in the Deer Park Refinery and enables us to further optimize our integrated value.”
Larry Ruple, TDWP’s executive vice president of business development, added, “We are excited for the opportunity to work with Shell on this project, and for the value it creates by adding the much-needed takeaway capacity for refined products in the strategic Houston Ship Channel market.”
With the long-term contract model fading, LNG’s success as a commodity will rely on providers’ ability to put the product on the water as cheaply as possible.
The terminal is located at the Port of Point Comfort in South Texas and is backed by long-term, fee-based contracts. NGL expects the terminal to be ready for commercial service in April 2017.
North Beach Terminal is scheduled for completion in the second quarter of 2017. In NuStar’s development plans, second dock will load Suezmax-class vessels, carrying about 1 million barrels of oil.