Max Midstream Acquires Seahawk Pipeline and Terminal with Plans to Expand

HOUSTON (P&GJ) — Houston-based Max Midstream announced it has  acquired the Seahawk Pipeline and Terminal at the Port of Calhoun from Oaktree Capital and plans to construct a new crude oil pipeline that will connect the Port to the Eagle Ford and Permian basin.

(photo: Max Midstream)

The new pipeline will transport up to 20 million barrels a month to a "revitalized" terminal at the Port, Max Midstream said.  Exports will begin with completion of the first phase in late 2020, it said, with plans for completion of a second phase by 2023.

Max Midstream said its system expansion with delivery to the Port of Calhoun will offer an economical alternative to export points in Houston and Corpus Christi, "which are typically at or near full capacity with congestion.

"This project represents a game-changer, as it will open a third option – the (Calhoun) Port," the company said in its Wednesday announcement.

Max Midstream said it now operates its newly aquired Seahawk pipeline that connects the Kinder Morgan Crude and Condensate Interconnect in Edna, Texas, to its Seahawk terminal at the Port of Calhoun. Future expansion will include new pipeline connections with Gray Oak and Victoria Express to Max Midstream's Edna terminal, allowing Permian and Eagle Ford crude oil exports via the port.

"By November of 2020 we will have 1.5 million barrels of storage built at Edna and 600,000 barrels of storage at the Port and the existing Seahawk pipeline, with the ability to export up to 4.2 million barrels a month," said Todd Edwards, president of Max Midstream.

"By the time the project is fully complete in 2023, we will have 9 million barrels of storage at Edna and 6 million barrels at the Port, with multiple pipelines to export crude through the Port," Edwards said, adding that Max Midstream would have nine 16-inch loading arms and three 8-inch barge loading arms at the port upon completion of the expansion.

"By developing the Seahawk Terminal at the Port, we will be able to offer a deep-water terminal with little congestion and the ability for producers to get their product to the Port at a very reasonable price," Edwards said.

Max Midstream said it has reached an agreement with the Calhoun Port Authority in which Max Midstream will invest $360 million to finance the deepening and widening of the Port by 2023. In the interim, Max Midstream has secured its own lightering zone to perform reverse lightering to export crude onto larger ships like Very Large Crude Carriers (VLCCs). 

Max Midstream will initially load Panamax ships and reverse lighter to larger ships in its lightering zone.  Once the widening and deepening project is complete, Aframax and Suezmax ships will also be able to load at the Calhoun Port, making it a viable option for any exporter seeking a port other than Houston or Corpus Christi, the company said.

"This will transform our port into a major oil exporting center, and it will transform our area with new jobs and new growth," said Charles R. Hausmann, director of the Calhoun Port. "This is an exciting day for the Port, the community and the state of Texas."

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