With the completion of the widened and deepened Panama Canal moving closer to the official opening in April 2016, many ports on the U.S. East Coast and in the Caribbean have been working hard to accommodate the anticipated increased number of larger vessels that will sail through the Canal. We have seen major infrastructure investments in ports in the Gulf of Mexico but nobody expected that the Louisiana International Deep Water Gulf Transfer Terminal project (LIGTT) – constructed at the mouth of the Mississippi River – would take off. However, backers of the LIGTT announced at the end of August that they have amassed enough private financing to begin the first phase of the project. Last year, at the PIANC Congress in San Francisco the project was highlighted by a representative of the Bechtel Corporation. Bechtel will play a major role in the project and has already begun pre-construction work for the 250-acre deep-water port.
The company will also provide preliminary services for overseeing the design and permitting of the facility including early procurement and terminal operator integration. But the offshore megaport project – with a size of around 250 acres and located three miles off the coast of Plaquemines Parish, 20 miles south of Venice – between the Port of Houston and Port of New Orleans – was branded as a failure within Bechtel due to the fact it took so long to secure the finance for the project.
Over the last couple of years, Bechtel has promoted the idea of offshore islands for the use of handling cargo – the thought process was merely based on the finance of such a project – it would be cheaper to build the island rather to go through a port expansion project onshore. As a result they have successfully constructed one offshore island off the coast of Africa and the concept has now been brought to the US.
Here the thought process is simple – when the multi-billion dollar Panama Canal project is finished next April it would only be able to accommodate
ships with draughts as deep as 50 feet – 5 feet deeper than what is now available on the lower Mississippi. The offshore terminal will have a water depth of more than 80 feet to accommodate “larger vessels” that are unable to use the new Panama Canal. The mega terminal will become a trans-shipment hub for the region whereby larger vessels are being unloaded and cargo put on shallow draught coastal and river vessels that could navigate to ports upriver or sail to other ports within the Gulf of Mexico.
Finance completed
The full development of LIGTT could take around five years to build at a cost of USD10 billion. The terminal will include facilities to handle containers, dry cargo and liquid bulk including liquefied natural gas (LNG). It has been estimated that if LIGTT reach its proposed
capacity the new hub will create “tens of thousands of jobs.” And although some services at the megaport would be automated, there would be a
need for operations staff that would live offshore at the facility. As a result, it will shuttle works to and from the offshore island with crew boats – like they already do for the offshore oil and gas industry. With the finance in place for the first phase, approval from the U.S. Army Corps of
Engineers and Coast Guard is necessary to begin construction of the offshore island. If approval is granted within an anticipated 9 to 12 month time frame, the first phase could be operational by late 2016. This first phase (out of five) will see the construction of a USD25 million dry bulk transfer terminal with a completion date of the summer 2016. This dry bulk terminal will handle grains, beans, fertilizer and other items. The next step would be to develop a container trans-shipment hub that would compete with neighbouring ports but also with other trans-shipment hubs like the port of Kingston in Jamaica and Freeport Bahamas. Containerised cargo was the original focus of the LIGTT project but input from private sector investors led to changes that involved a broader variety of cargo. Handling of containers remain a very significant part
of the LIGTT vision, hence the hub will be able to accommodate eight 18,000+ TEU container vessel simultaneously in about 36 hours. Currently, no other port in the Caribbean can offer that at the moment and this quick turnaround will be a major attraction for shippers. Wal-Mart, the global retailer that’s most likely to take advantage of the new “Panamax” class cargo ships, has already committed to the project and have been influential in shaping LIGTT. They have already indicated they would be interested in shipping containers through the terminal even if it added time to their delivery, which shows that cargo shippers are willing to add time if it means they can save money with volume.
Concerns
In response to the announcement that the LIGTT is a go, Gary LaGrange, President and CEO of the Port of New Orleans, issued a statement wishing
the project well. LaGrange did point out in the statement that “there are aspects to the overall scope” of its development that could “represent
duplicity” with his port.
“We don’t see the feasibility in duplicating what is already in existence with plans to expand,” said LaGrange. “Louisiana’s present and future container operations are at the Port of New Orleans. Funding of more than USD300 million has been invested in the Napoleon Avenue Container
Terminal, which is served by six class one railroads with a new USD25.1 million intermodal transfer terminal currently under construction. Future plans call for the terminal to be expanded to a capacity of 1.5 million TEU.”
Another port that has expressed concerns for the project, is the Port of South Louisiana – upriver near LaPlace. The port handles the same dry bulk cargo the first phase of LIGTT intends to transfer. Paul Aucoin, president of the port, said he supports “any idea that sends more ships that can fit under the Huey P. Long Bridge” to his facility. Aucoin was more uncertain as to whether there would be an interest among cargo carriers to
send larger ships to the mouth of the Mississippi. “Most cargo is time-sensitive,” said Aucoin. “I can’t see why they would go through a transfer to get to the five ports on the lower Mississippi that they’re already servicing.” Although finance has been put in place for the first phase – without the approval (yet) from the U.S. Corps of Engineers – and an overwhelming response from the industry, financial backers of the project are confident
that the five phases will be built within the set timeframe. But there is a fly in the ointment. The U.S. Corps of Engineers that have to approve the plans has been studying the feasibility of a potential USD300 million dredging project to deepen the lower Mississippi River by as much as 5 feet compared to the USD10 billion to build the offshore island.