Howard Midstream plans Port Arthur terminal expansion

Howard Midstream Energy Partners LLC (dba Howard Energy Partners, HEP) is expanding its midstream terminal operations in Port Arthur, Tex., to support Diamond Green Diesel Holdings LLC’s (DGD)—a 50-50 joint venture of Valero Energy Corp. and Darling Ingredients Inc.—construction of a grassroots 470-million gal/year renewable diesel plant at Valero’s 395,000-b/d Port Arthur refinery, about 90 miles east of Houston along the Texas Gulf Coast (OGJ Online, Jan. 29, 2021).

As part of long-term agreements with DGD, HEP will build 575,000 bbl of tank storage, three pipelines with associated connections to Valero’s Port Arthur refinery, 7 miles of rail track with associated rail loading-unloading capabilities, truck unloading installations, and a deepwater dock equipped to accommodate Panamax-sized vessels, HEP said.

Designed to handle DGD’s new renewable diesel production, HEP’s new installations at Port Arthur also will include additional capacity for third-party shippers, according to the operator.

With engineering, permitting, and construction activities already under way for the Port Arthur terminal expansion, HEP said it expects to enter new installations into service in tandem with startup of DGD’s renewable diesel plant in second-half 2023.

Following the proposed expansion, HEP said the Port Arthur terminal will include 1.9 million bbl of refined product storage capacity, 16 miles of rail track with unit train and manifest service from two railroads, three barge docks, two ship docks, and pipeline connectivity to local refiners and major refined product distribution hubs.

HEP did not disclose an estimated cost of the planned expansion project.

DGD’s project

At an estimated construction cost of $1.45 billion to be split equally between Valero and Darling, and funded from internal cash flows provided by DGD, the new Port Arthur renewables plant—once completed and when combined with the JV partners’ previously announced expansion of the operator’s 290-million gal/year renewable diesel plant in Norco, La.—will increase DGD’s total renewable diesel and renewable naphtha production capacities to 1.2 billion gal/year and 50 million gal/year (OGJ Online, Nov. 2, 2020).

Upon announcing the project in early 2021, Valero said investment in the DGD Port Arthur renewables project comes as part of the company’s plan to increase its existing long-term competitive advantage in low-carbon transportation fuels amid ongoing demand for renewable fuels as low-carbon fuel policies continue to expand globally.