Citing safety, security and other concerns, two key players in Texas City’s maritime industry are objecting to the proposed location of the offshore portion of an $800 million ammonia processing plant that city officials courted with tax incentives.
Officials with the Port of Texas City and the Galveston-Texas City Pilots Association said they didn’t oppose the project overall, but objected to the proposed site and urged a review and reconsideration of that plan.
“The Port of Texas City has several key concerns with the site related to public interest factors including safety, security, navigation and economics,” wrote Karol Chapman, president and executive director of the private Port of Texas City, in a letter to the U.S. Army Corps of Engineers.
Officials with both groups said they were concerned about how the proposed offshore dock would affect traffic along the Texas City Ship Channel.
The port, along with the pilots, are objecting as officials with Gulf Coast Ammonia seek corps approval and permits for the design of the offshore dock.
Gulf Coast Ammonia officials did not respond to a request for comment Tuesday.
Corps approval and permits would be the first of several steps the company must take to build the dock, officials said.
Gulf Coast Ammonia was formed in a partnership between Miami-based Agrifos and Borealis AG, Europe’s second-largest producer of polyethylene and polypropylene.
Shortly after forming, company officials announced plans to build an ammonia plant along the Texas coast.
Officials chose Texas City after commissioners in December approved a 10-year tax abatement for the proposed ammonia plant.
The Texas City Commission voted unanimously to approve a Chapter 312 tax abatement agreement and a Chapter 380 Economic Development and Performance Agreement with Gulf Coast Ammonia LLC and Eastman Chemical Texas City Inc.
Commissioners also voted to amend the boundaries of Texas City Gulf Coast Reinvestment Zone 1, where the plant was to be built.
At the time of the vote, no residents spoke about the project and commissioners did not make any lengthy comments.
Texas City Mayor Matt Doyle couldn’t be reached for comment Tuesday about objections lodged by the port and the pilots.
The proposed facility would produce about 1.35 million metric tons a year of ammonia, according to documents released to The Daily News.
Officials with both the port and the Galveston-Texas City Pilots Association this week stressed they did not oppose the plant itself, but objected to plans for the offshore dock.
“We are certainly not opposed to Gulf Coast Ammonia,” Chapman said. “We are all about growth and business — it’s a good thing for everybody. However, we have got to be sensitive when we’re talking about a shared resource that is a port, that we don’t adversely impact any neighboring industries.”
Gulf Coast Ammonia plans to build a 140-foot long, 89-foot wide barge and dock facility bordering the Texas City Ship Channel about 3,800 feet away from shore, according to documents provided to the corps.
The dock would be connected, via pipeline, to Gulf Coast Ammonia’s actual plant, which would be in the Eastman complex at 201 Bay St. S.
The proposed dock would host barges and ships carrying liquid anhydrous ammonia, according to documents provided to The Daily News.
Anhydrous ammonia is a colorless gas with pungent, suffocating fumes used as an agricultural fertilizer and industrial refrigerant, among other applications, according to the U.S. Centers for Disease Control and Prevention.
“When handled improperly, anhydrous ammonia can be immediately dangerous to life or health,” according to the CDC.
Anhydrous ammonia, along with ammonium nitrate, may have contributed to April 2013 explosion at a fertilizer plant in West that killed 15 people and injured about 180. The plant in West stored about 110,000 pounds of anhydrous ammonia, according to the New York Times.
Anhydrous ammonia was deemed an especially hazardous cargo in a 2010 U.S. Coast Guard Authorization Act, which means it poses a significant risk of creating a transportation security incident, according to a coast guard memo.
“As such, every vessel, entering or exiting the Port of Texas City will have to pass tankers being loaded with anhydrous ammonia at the proposed site,” Chapman wrote. “Also, no explanation is provided on how vessels docking at the proposed location will be turned and whether use of the Texas City Turning Basin is proposed or has been evaluated.”
Officials with the 16-member Galveston-Texas City Pilots Association on Tuesday said they shared the port’s concerns.
“We’re with the port,” said James Andrews, the association’s director of operations. “We think this needs to be re-reviewed and we think there may be a better plan than the one we reviewed.”
The pilots met with officials from Gulf Coast Ammonia and reviewed early plans for the dock, but argue the current design needs to be reconsidered, Andrews said.
Texas City’s 10-year tax abatement agreement with Gulf Coast Ammonia includes a stipulation that the company pay the city a lump sum of money during each of those years, said Chris Nichols of Nichols Firm, a Houston law firm hired by the city to execute the contract, at the December meeting.
The tax abatement will begin in 2021, Nichols said. Under the terms of the agreement, the company will pay a lump sum each year for 10 years to the city in lieu of paying property taxes so long as the value of the property is at least $450 million, Nichols said.
Those payments each year could range between $750,000 and $1 million depending on the value of development, Nick Finan, Texas City director of management services, said in December. The payment to the city would be equal to about 40 percent of what the company would otherwise pay, Nichols said.
It works out to an effective 60 percent reduction in taxes the company would pay to the city, Nichols said.
Corps officials Feb. 27 called for a public comment period over the proposed offshore dock that will end March 29.