Natural Gas Boom Likely to Compound Congestion at Ports in Gulf

Posted by PortVision

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With the increase in America’s production and export of natural gas, some industry experts warn of bigger traffic jams among tankers at the busiest ports in the Gulf. The congestion is not exactly on par with an LA freeway at rush hour, but sizable enough to cause costly delays.

Throughout the history of ports in the region, shipping delays, mostly from weather, have been a fact of life. From the buffeting winds and surging tides of hurricanes and tropical storms to the decreased visibility caused by heavy fog, shippers have long had to take into account Mother Nature’s mood swings. Weather delays have always been a possibility, along with the routine bottlenecks they cause.

But now, with the proliferation of new natural gas and petrochemical plants in the region, the large tankers that deliver those products to countries across the globe are also facing the prospect of delays due to more and more tanker traffic.

According to analysts at Poten and Partners—consultants specializing in the energy and transportation industries—the supply surge of natural gas has not only put the U.S. on a path to become a net exporter of fuel, it has also created a need for the expansion of pipelines, facilities, and waterways that move that product to market. Nearly 20 new export terminals are in the works on the Gulf Coast, which means even more ships will be vying for spaces to berth and load.

“A lot of waterways in the Gulf aren’t ready for prime time,” says Gordon Shearer, a senior adviser at Poten.

Alternative solutions to Gulf congestion?

Some have argued that a solution to the traffic jams predicted for the Gulf is to open gas export terminals on the East and West coasts. But state and local opposition there has so far kept LNG projects situated mainly in the Gulf.

“The Gulf Coast is the only section of the country that welcomes the petrochemical industry,” says Channing Hayden, director of navigation at Louisiana’s Lake Charles. “This is where the petrochemical industry is. It is where the pipelines converge.”

Texas A & M study looks into the matter

A 2015 study by Texas A & M University’s Transportation Institute looked specifically at chemical tanker transits in the Houston Ship Channel. The study noted that when volume is high, some ships spend days or even weeks trying to rotate through.

Tankers transporting crude or refined oil products typically make just one stop per port. But chemical tankers often make several—not unlike a city bus—filling up or dropping off at various segregated tanks. That’s because different cargoes have different temperature and storage needs. Tanks must be inspected, and after they’re unloaded, cleaned. All of which complicates and slows the movement of these tankers through the ports.

The Texas A & M study also pointed to the “Notice of Readiness” (NOR) tankers are required to submit when they arrive. The problem arises when a ship, in an effort to hedge its bets, files NORs at multiple terminals. After it initially heads to the best one to load or discharge cargo, it sometimes fails to cancel the others. Those other terminals, expecting that ship to arrive, hold open a place for it—resulting in longer waits for other ships in the queue, and bigger bottlenecks.

The president of the Greater Houston Port Bureau, Capt. Bill Diehl, countered the suggestion that the ports in the Gulf, and specifically in the Houston Ship Channel region, are congested or capacity constrained. The Greater Houston Port Bureau and its member companies are investigating ways to increase the efficiency of chemical tankers movements in the Houston Ship Channel, which usually have more complex port visits than other vessel types.

Looking ahead, the study concludes that congestion is, unfortunately, likely to get worse before it gets better: “Given the rapid rate of expansion in the chemical and petrochemical industries in Houston, the current situation can be expected to deteriorate rather quickly.”

PortVision was created in 2007 as part of an initiative to increase efficiency and transparency of the Sabine-Neches waterway. Since then, it has expanded into the Gulf of Mexico and the rest of the world. Today, our customers use PortVision to help schedule their vessels as they move through these busy shipping channels. TerminalSmart has helped customers save millions of dollars by reducing demurrage and optimizing dock utilization. To learn more about how PortVision can help your company navigate the congestion in the gulf, call us at 1-713-337-3737 or contact us HERE.

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Posted on Jul 18, 2017, 1:04:08 PM

Topics: Tankers, AIS, LNG, TerminalSmart, Shipping, Demurrage