Port of Corpus Christi to Improve Aging Rail System
Oil isn't quite worth what it used to be, but officials for the Port of Corpus Christi say now is the time to finish its plans to improve its aging rail system.
Big, bulky cargo ships and fleets of large trucks are certainly the most visible aspects of any port of call. But here, at the Coastal Bend's largest port, its 43-mile network of tracks, engineers, conductors and railcars also play a huge role.
It's one that is becoming increasingly important as M&G Resins USA inches closer to open its massive plant.
The port in April 2015 wrapped up the first phase of the expansion of its Nueces River Rail Yard, an $18 million project that involved creating eight unit train sidings and providing rail storage for nearly 1,300 railcars.
Now, the second stage of the project is well underway, calling for additional railcar spots and more storage.
Completing that segment — expected to cost about $28 million, $22 million of which will be paid for with a grant from the state — is crucial with M&G Resins USA's massive plant nearing completion, said John Slubar, manager of rail operations for the port.
The Port Authority was briefed on the project during its regular meeting on the week that ended April 22.
Rail traffic has steadily climbed since the Joe Fulton International Trade Corridor opened in 2007. Port officials expect traffic to further increase once M&G Resins, an Italian company, opens its 412-acre, $1 billion polyethylene terephthalate resin-processing plant along the Nueces Bay shoreline.
Company officials said construction remains on pace to finish by the second half of this year.
When completed, M&G's plant will be the world's largest single-line producer of polyethylene terephthalate, or PET, and purified terephthalic acid, or PTA. Both are materials that are used to make plastics.
Work to improve the port's rail system now represents "a long-term vision in the works," said Jim Lee, chief economist at Texas A&M University-Corpus Christi.
Clearing the decks for M&G is one thing; shoring up more efficient rail can only help the port when crude prices surge and when the growth potential from the Panama Canal expansion and the opening of the Cuban market is finally realized, he said.
"The shale oil boom was a game changer for South Texas, but that was history," Lee said. "For Corpus Christi, a new game changer is unfolding. ... Improvements in the port's rail system and the entire infrastructure will become part of this new game changer."
Oil prices are nearly half their value of just two years ago, but companies are still producing and shipping their commodities, albeit with fewer people. The Association of American Railroads estimates U.S. freight railroads carried more than 400,000 carloads of crude oil in 2013, compared with 234,000 the year before and just 9,500 in 2008.
There were 42 rigs operating in the Eagle Ford Shale energy play for the week that ended April 15, down from 46 the week before.
There were nearly 250 rigs drilling in the region just three years ago, when West Texas Intermediate crude traded for $92 a barrel.
That may not always be the case.
"It is only a matter of time that crude oil prices will return to levels that would warrant sustained exports of crude oil and (liquefied natural gas) from the Eagle Ford, as well as the Permian Basin," Lee said. "We are now playing the waiting game."
In January, M&G's parent company M&G Chemicals said it would increase the capacity of the Corpus Christi facility to 1.1 million tons of PET annually. The move came after M&G increased PET capacity at its facilities in Mexico and Brazil 30%.
