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Global Companies Invest in the Future of the Coastal Bend

Drawn by low energy costs, transportation infrastructure and a ready workforce, global companies are investing billions in the Coastal Bend region.

By Laura Hill on August 4, 2015

With long-term confidence in the future of the Eagle Ford Shale oil and gas boom, global companies are investing in infrastructure to support production and processing of hydrocarbons pumped from beneath the South Texas countryside, while others are tapping into the abundant supply of natural gas that is driving down energy prices and boosting exports across the Coastal Bend Region.
Companies based in Austria, China, Italy, Sweden, Australia, Canada, the United Kingdom and other nations have contributed $3.5 billion in foreign direct investment to the region – and that amount is projected to grow.
One of the main draws is Port Corpus Christi, a hub for shipping petroleum products that offers deep water access within three miles with rail. That decreases transit times for vessels and allows heavier cargos to move through the port.
Global Connections
Swiss global commodities trading and logistics firm Trafigura A.G. invested $200 million to grow its terminal and storage facilities at the port, expanding from one dock to enough space to accommodate three ocean vessels at a time and adding a million barrels of tank capacity, says Kevin Beasley, project manager.
As crude oil imports at the Port have declined, the company has added capacity for exports to support its global organization and customer base. Trafigura also took over a pipeline to transport crude oil from the Eagle Ford Shale production fields to Corpus Christi.
“We’re in this for the long term, and we’ve always been a big exporter of refined products,” Beasley says. “This investment fits very well with our business profile to supply our customers and other divisions around the world.”
voestalpine, an international steel company based in Austria, recently broke ground on a $700 million facility at the port’s La Quinta Trade Gateway Terminal with the capacity to produce 2 million tons per year of hot briquetted iron used in steel production. With the cost of natural gas about half that of Europe, the plant’s 150 employees will supply steel mills in Europe, as well as the United States.
“We investigated 17 locations in eight countries for this project, and, in the end, Texas was the most promising on all key criteria, such as logistics, energy supply, well-trained employees and political environment,” says Wolfgang Eder, CEO of voestalpine.
Italian plastics manufacturer M&G Resins will also depend on output from the Eagle Ford Shale to power their two plants producing up to 14,000 rail carloads per year of PTA and PET plastic resins from its new location under construction at the Port’s Inner Harbor.
The company chose the location in part for its access to three Class I rail carriers, says Mauro Fenoglio, project manager for M&G Resins. The Port is working to boost that access, expanding its Nueces River Rail Yard with eight 8,000-foot sidings for unit trains.
Another deciding factor for M&G was the region’s proximity to raw materials produced by the oil refineries.
“We’re in an exceptional position from a logistics standpoint,” Fenoglio says. “One of the products coming out of the refineries is our main raw material, and that is one of the most important drivers for our decision to come to Corpus Christi.”
Gearing Up for Growth
Continued development of the Eagle Ford Shale will require infrastructure, and TPCO America, a subsidiary of Chinese manufacturer TPCO America Corporation, is building a $1.1 billion steel pipe processing plant that will cover 1.6 million square feet and supply pipe to oil fields. Over the first 10 years, the economic impact of the operation is expected to exceed $10 billion and create more than 600 to 800 jobs.
The company visited more than two dozen locations before settling on Corpus Christi, notes J.J. Johnston, Director of Administration. The plant will ship pipe to customers in North and South America, Europe and West Africa for petroleum production and other uses.
The region’s transportation infrastructure helped seal the company’s decision compared to other potential locations.
“It allows for more rapid access for certain targets, and the plant’s location near Port Corpus Christi will further support our export capabilities,” Johnston says.
Read more about transportation in the Coastal Bend Region.

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