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Golden Triangle is Golden Again
Industrial work takes off in Southeast Texas
By Debra Wood
The industrial market continues on a steamroll in the Houston and Port Arthur region, part of the Golden Triangle which includes Beaumont, with major projects at the port and area refineries.
The Port of Houston’s new Bayport Container Terminal, which opened last year and has expansions currently under way, has spurred additional, private development around the area.
“It’s the hottest area in Houston when it comes to new construction,” says John Ferruzzo, principal of industrial brokerage services for NAI Houston, a real-estate services firm. “The Bayport Terminal, almost at capacity already, is driving demand.”
Ferruzzo adds that most of the construction entails tilt-wall distribution buildings, with 24-ft clear heights, fast-response sprinkler systems and 120-ft or larger truck aprons. He says that most of the developers are putting up the large, 300,000-sq-ft to 1 million-sq-ft buildings on speculation and will lease space to multiple tenants.
Duke Realty Corp. of Indianapolis recently acquired 161 acres near the Port of Houston, in Pasadena/LaPorte. It plans to spend $140 million to develop the property into the FairPort industrial development, which when complete in seven to nine years will be able to accommodate up to 2.9 million sq ft of industrial space. Duke anticipates breaking ground late this year or early 2009, beginning with warehouse, bulk distribution or light-manufacturing facilities.
“The Port of Houston is seeing good container growth, year over year, and it’s well balanced [between] inports and outports,” says David Hudson, senior vice president of Duke’s Houston operations. “It’s a big enough piece of dirt that we felt we could build a first-class industrial park.”
Port of Houston swells The Port of Houston’s Bayport Terminal complex continues to grow, adding container yards, wharf space and amenities for cruise-ship passengers. The Bayport Container Terminal will be built out over 15 to 20 years and will have a maximum capacity to handle about 2.3 million 20-ft-equivalent containers at build-out, space for seven ships to dock and a 378-acre container storage yard.
“It’s a complex, phased development, because as things go on you have a lot of different contractors,” says Stephen Gilbreath, project engineer with Lockwood Andrews and Newnam of Houston. “When the facility is done, it is going to be the largest container terminal on the Gulf of Mexico.”
LAN completed a master plan for the port and designed the first 60-acre container yard, a 750,000-gallon elevated storage tank, lift station and electrical substation, all now finished. It serves as program manager for phase one, which includes work currently under way and about to get started.
The port authority expects the new $80 million-plus Bayport Cruise Terminal will open this fall. It includes a 1,000-lin-ft dock, a 98,000-sq-ft terminal building and parking for up to 1,000 cars.
Orion Construction of Houston built the wharf, Morganti Texas of Houston the terminal and Zachary Construction Corp. of San Antonio the parking lot and utility work.
The two-level, contemporary, steel-frame terminal building uses a Kalwall translucent building system. The back of the building is glass, so people can watch the ships dock.
The port authority expected to open a $60 million, 43-acre, roller-compacted, concrete-paved container yard and gate expansion in March. McCarthy Building Cos. of Dallas completed the work.
“This is the port’s first attempt using roller-compacted concrete,” says Ty Thomas, LAN program manager for Bayport Phase 1. “It’s faster. It doesn’t have any reinforcing steel. It’s an unreinforced concrete mat. Eliminating the steel eliminates the time required for forming and placement of the rebar.”
Thomas says, the original design called for 20-in thick concrete, but when the contractor’s equipment could only place 18 in, 9 in with each pass, the paving was re-engineered to use a beefier, lime-stabilized and cement-stabilized subgrade to compensate.
To handle stormwater runoff, first-flush ponds were built. The first inch of stormwater will flow into the ponds, where solids will settle out. The port will monitor outflow.
“It’s a robust system,” Gilbraeth says. “This is the first port terminal in the Unites States to head down this road and agree to do a first-flush water-quality feature.”
New opportunitiesBidding should take place later this year with construction to start in early 2009 on the next 48 acres of container space. Thomas expects bids to come in between $50 million and $60 million.
In January, the Port Commission began advertising for bidders to build 1,330 lin ft of additional wharf space, with the contract value estimated at $74 million. When complete, the 138-ft-wide wharf will allow three large ships to berth at Bayport.
“The wharf is supported on drilled shafts and is designed to support rail-mounted dockside cranes with a gage (distance between rails) of 100 ft,” says Mark Vincent of Port of Houston Authority project management. “The dredging for the new wharf was performed in advance by separate contract, in order to shorten the overall construction period. As a result, the wharf deck will be constructed over water.”
The authority plans to award contracts in mid-2008 for the 32,000-sq-ft Bayport Administration Building, 60,000-sq-ft Maintenance and Repair Building and 1,300-sq-ft Marine Emergency Building. Vincent pegs the cost of the buildings at $22 million.
An intermodal center to facilitate moving cargo by rail is planned, but Gilbreath estimates it is still a couple of years from happening.
Thomas says two more cruise terminals are in the works, but their construction will depend on how well the cruise business takes off.
The port has contracted with the Texas Department of Transportation to construct the Secured Truck Entrance at Cargo Bay Road and to widen Main Street in Galena Park.
Refinery expansions Motiva Enterprises of Houston and Total of France are undertaking major Port Arthur refinery expansions.
In mid-February, Total announced a $2.2 billion project to build a 50,000-barrel-per-day coker, a desulfurization unit, a vacuum distillation unit and other related units, scheduled to come online in 2011. The project will add 3 million tons per year of ultralow-sulfur automotive diesel to the refinery’s current production
In December, Motiva broke ground on a $7.1 billion expansion on its refinery, which was built in 1903. Bechtel/Jacobs Joint Venture, a partnership between Bechtel Corp., which has an office in Houston, and Jacobs of Pasadena, Calif., manages the project as the engineering, procurement and construction contractor. The expansion will increase crude oil refining capacity by 325,000 barrels per day bring the total capacity to 600,000 b/d when complete in 2010. Motiva declined to be interviewed for this article, referring all inquiries to Bechtel/Jacobs.
“We’re adding equipment and capacity to the Motiva structure that will make it something in the neighborhood of the largest refinery in the United States,” says Bob Deatherage, industrial relations manager for the Motiva Expansion Project for Becon of Houston, a subsidiary of Bechtel. “For every unit you see in the refinery, we are building another next to it.”
Deatherage says the company will install a crude unit, a gas plant, a 6-ton delay coker, a hydrotreater, an integrated hydrocracker hydrotreater and a small electrical generation station.
Workforce worries “Building something like this in an operating environment is a challenge,” Deatherage adds. “It’s all skilled work, and the issue in the Golden Triangle is the availability of the craft base.”
The team had between 1,100 and 1,200 joint venture staff and subcontractors working on site in February. Construction activity is expected to peak in early 2009, with 6,000 or more workers on site.
“One of the biggest risk factors we have in execution is the availability of the workforce,” Deatherage says. “Our goal is to make this the project of choice for the craftspeople workforce.”
Becon hires about 800 people each month. It is recruiting locally from the surrounding area and nationally. It is providing training and has worked with local entrepreneurs to ensure affordable housing is available in apartments, RV parks and hotel rooms. Workers receive a housing allowance.
“This is the largest project in the U.S.,” Deatherage says. “It’s been 25 or 30 years since a new refinery was built in the United States, and this is an exciting project with unique challenges and opportunities.”
Key Players
Port of Houston
Owner: Port of Houston
Program Management: LAN (Lockwood Andrews and Newnam), Houston
Container Yard Opening March 2008: McCarthy Building Cos., Dallas
Cruise Wharf: Orion Construction, Houston
Cruise Terminal: Morganti Texas, Houston
Cruise Parking and Utilities: Zachary Construction Corp., San Antonio
Motiva Expansion Project
Owner: Motiva Enterprises, Houston
EPC Contractor: Bechtel/Jacobs Joint Venture, a partnership between Bechtel Corp., Houston, and Jacobs, Pasadena, Calif.
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