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38 THE JOURNAL OF COMMERCE www.joc.com JUNE 9.2014 U.S. GULF REPORT SPECIAL REPORT PORT FREEPORT HAS deep water, plenty of acreage for expansion, and a location in the midst of the Texas petrochemi- cal industry. Now the diversifi ed port southeast of Houston is taking new steps to expand its container-handling capa- bilities. Two post-Panamax gantry cranes that can span 18 rows of containers are scheduled to arrive by the end of July for installation at Freeport's Velasco Terminal. Glenn Carlson, the port's executive director and CEO, said the cranes open new possibilities for feeder services and existing customers, and for serving the region's bur- geoning petrochemical industry. Like other ports along the west- ern Gulf Coast, Freeport is benefi ting from the shale drilling boom that has produced a resurgence in U.S. petro- chemical manufacturing. Tenaris Pipe Manufacturing is building a $1.5 billion plant at nearby Bay City, Texas, to produce 600,000 tons a year of seamless pipe from imported steel billets. Other proj- ects include conversion of a liquefi ed natural gas import terminal to an export facility, export terminal and other expansion proj- ects at a Phillips 66 facility at Freeport and Dow Chemical at nearby Lake Jackson. The Tenaris, Freeport LNG Develop- ment and Phillips 66 projects represent only a fraction of the nearly $30 billion in indus- trial investment that has been announced for the area. Most of the projects were planned to take advantage of low-cost natural gas produced from shale drilling. Port Freeport has formed a joint ven- ture with heavy-lift specialist Mammoet to handle oversize shipments, and is add- ing laydown acreage for project cargo storage. Each of the Freeport LNG ter- minal's two "trains," or systems for gas liquefi cation, will require 175 cubic meters of project cargo, Carlson said. Petrochemical plants consume large quantities of natural gas for energy and as a manufacturing raw material. For years, high prices made U.S. plants uncompetitive and forced companies to shift production overseas. That changed with the increased use of horizontal drilling and hydraulic fracturing to unlock gas and oil deposits in under- ground shale. The largest centers of shale drilling include the Barnett formation in north central Texas, the Haynesville forma- tion in east Texas and north Louisiana, the Permain basin in West Texas and the Eagle Ford formation. Industrial prices for natural gas at Gulf Coast plants tumbled from a peak of about $13 per thousand cubic feet in mid-2008 to $3 last year. They've since risen to about $4.50 but remain about one-third the prices paid by European producers and one-fourth the prices of Singapore. Methanex Corp., for example, is disman- tling two of its methanol plants in Chile and moving them to new plants in Geismar and Gonzales, Louisiana, on the Mississippi River a few miles downstream from Baton Rouge. "The U.S. is now viewed as the region to locate production," the American Chemistry Council said in a recent report. U.S. petro- chemical investment attributable to shale drilling exceeds $100 billion, the council reported in February. If all proposed announcements of new plants and expansions are completed, U.S. petrochemical expansion will increase 33 percent by 2017, according to a recent report by the Dallas Federal Reserve Bank. More than three-fourths of this invest- ment is concentrated on the Gulf Coast. The region already is home to the largest con- centration of petrochemical plants, which tend to cluster in order to share feedstock, byproducts and infrastructure. One such cluster is at Geismar, where BASF opened a new methylamines plant in 2011, began production on a surfi cants plant this year, and last fall broke ground on a $138 million formic acid complex. And there's more to come: During the last year, other companies have announced seven other large projects in Ascension Parish, which includes Geismar. JOC Contact Joseph Bonney at jbonney@joc.com and follow him on Twitter: @JosephBonney. By Joseph Bonney PORT FREEPORT'S CHEMICAL REACTION The port is expanding its container-handling operations to meet expected growth in petrochemicals shipments THE JOURNAL OF COMMERCE www.joc.com THE JOURNAL OF COMMERCE www.joc.com THE JOURNAL OF COMMERCE www.joc.com THE JOURNAL OF COMMERCE www.joc.com THE JOURNAL OF COMMERCE www.joc.com THE JOURNAL OF COMMERCE www.joc.com THE JOURNAL OF COMMERCE www.joc.com THE JOURNAL OF COMMERCE www.joc.com THE JOURNAL OF COMMERCE www.joc.com THE JOURNAL OF COMMERCE www.joc.com THE JOURNAL OF COMMERCE www.joc.com THE JOURNAL OF COMMERCE www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com www.joc.com Source: American Chemistry Council CHEMICAL INDUSTRY CAPITAL INVESTMENTS ■ The U.S. chemical industry plans signifi cant capital investments concentrated on the Gulf Coast. Gulf Coast Other Midwest Ohio Valley OHIO VALLEY 13% GULF COAST 78% OTHER 1% MIDWEST 8%