Expansion of the Panama Canal – A Game
Changer: Port of Houston and Beyond
Juan B. Sosa, Consul General of Panama
CAPT Bill Diehl, USCG (Ret.)
The Panama Canal
How A Canal Works
Suez Canal Type
New Third Set of Locks at the Panama Canal
Panama Canal Construction
The Panama Canal Connects 144 Trade Routes
Across the Globe
The Port of Houston
• No. 1 U.S. Port in foreign waterborne tonnage
• Home to largest petrochemical complex in the U.S.
(2nd largest in the world)
• 2.1 million jobs per year nationwide
• Generates $500 billion in annual economic activity
nationwide
2011
Pure Car
Carrier
1%
LPG
5%
Pilot Moved
Tug and
Barge
5%
8,022 Ships
Tanker
45%
General
Cargo
11%
2014
8,338 Ships
Container
11%
Chemical
Tanker
13%
Pure Car Carrier LPG
7%
1%
Tanker
34%
Bulk
8%
Annual Vessel Arrivals
Port of Houston
Pilot Moved
Tug and Barge
5%
General Cargo
12%
Container
12%
Chemical
Tanker
16%
Bulk
12%
Houston Crude Oil Imports by Quality
In thousands of barrels
200000
180000
160000
140000
120000
100000
80000
60000
40000
20000
0
2009
2010
Light Sweet
*Source EIA 2015
2011
Light Sour
2012
Medium
Heavy Sweet
2013
Heavy Sour
2014
Estimated Petroleum Exports for the Port of Houston
(MBD)
MBD
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
2003
2004
2005
2006
2007
Refined Products
*Source Greater Houston Port Bureau, EIA
2008
2009
Chemicals
2010
NGLs
2011
Crude Oil
2012
2013
2014
2015
$100 Billion+ in Planned U.S. Petrochemical
Investment
Pacific Northwest
• Northwest Innovation 2018 New Methanol
(2 locations)
• Tesoro
2017 New Xylene
Iowa
• LyondellBasell 2014 Ammonia expansion
• Orascom (OCI) 2015 New fertilizer
• Iowa Fertilizer 2015 New Ammonia
Houston Ship Channel and surrounding, TX
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Ascend
Celanese-Mitsui JV
Chevron Phillips Chemical
Chevron Phillips Chemical
Enterprise
Exxon Mobil
Exxon Mobil
Formosa
Formosa
Ineos
LyondellBasell
LyondellBasell
LyondellBasell
Flint Hills (Petrologistics)
2015
2015
2014
2017
2016
2017
2016
2018
2016
2014
2015
2014
2014
TBD
New propane PDH
New methanol
New hexane
New ethylene
New propylene
New ethylene
New polyethylene
New ethylene
New propylene
Ethylene debottleneck
Ethylene expansion
Propylene debottleneck
New polyethylene
New PDH
Monaca, PA
• Shell
Indiana
• Midwest Fert.
2016
2015
BASF-Yara
BASF
Dow
Dow
Dow
Dow
Dow Agrosciences
CP Chemical
CP Chemical
2018+
2019
2017
2015
2018
2017
TBD
2017
2017
• Huntsman Chemical 2015 Epoxy expansion
Baton Rouge – New Orleans Corridor, LA
•
•
•
•
•
•
•
•
•
New ammonia
Methane-to-propylene
New ethylene
New PDH
New propylene
Gas to Liquids
Herbicide
Ethylene expansion
New polyethylene
LyondellBasell
Formosa
Formosa
Formosa
M&G Group
M&G Group
Oxy/Mexichem JV
late-2015
2017
2016
2016
2016
2016
2017
Ethylene expansion
Ethylene dichloride
New PDH
New propylene
New PET
New PTA
New ethylene (2 units)
Axiall / Lotte
BioNitrogen
Eurochem
CF Industries
Methanex
Methanex
S. LA Methanol
Valero
Dyno Nobel
2018
2015
2017
2015
2015
2016
2016
2016
2016
Ethylene expansion
New UAN
New ammonia
Ammonia expansion
Methanol migration
Methanol migration
New methanol
New methanol
New ammonia
Lake Charles, LA
Corpus Christi / Point Comfort, TX
•
•
•
•
•
•
•
• Odebrecht TBD New ethylene
• Dominion 2014 Gas fractionation
restart and expansion
Mobile, AL
Urea expansion
New ammonia
Freeport – Old Ocean, TX
•
•
•
•
•
•
•
•
•
Parkersburg/Natrium, WV
2017 New ammonia
OK
• Koch
• LSB Ind.
2018 New ethylene
Beaumont – Orange, TX
•
•
LANXNESS
2016
Orascom Construction (OCI)
2016
•
•
•
•
•
G2X
LyondellBasell
Sasol
Sasol
Westlake
2017
late-2015
2018
2016
2015
Methanol-to-gasoline
Ethylene expansion
New ethylene
New polyethylene
Ethylene expansion
Butadiene rubber
New methanol
*Notes: Date reflects anticipated year in-service, red font
reflects construction in progress
Sources: ICIS, Company announcements, Kirby Corp.
US Producers to Target Key Markets
Waterborne Foreign Trade
Houston - Millions Metric Tons
180
160
140
120
100
80
60
40
20
0
2011
2012
Imports
2013
Exports
2014
Houston Total Trade
2015
2016
2017
2018
The Canal Shifts the Market to the USGC/USEC
Cost Based on:
• 4,000 TEU Vessel
• Canal Tolls January 2011
• $467.00 / MT Bunker (HFO)
• Actual Charter Rate
Cost Based on:
• 8,000 TEU Vessel
• Canal Tolls January 2011
• $467.00 / MT Bunker (HFO)
• Actual Charter Rate
Challenges
• Predictability
•
•
•
•
•
Environmental
Safety
Security
Dredging
Efficiency
Dredging Challenges
• Harbor Maintenance
Trust Fund
• PHA Study – Wider vs.
Deeper Dredging
• Accommodating PostPanamax Ships
Waterside Congestion
• Inefficient scheduling
•
Increase in non-productive
movements
• Increase in waterway
congestion
Shoreside Congestion
• Insufficient Supply chain growth
• Transportation
• Work Force
• Storage
Questions/Comments?