Plans for Gulf Coast Ammonia’s plant in Texas City are moving forward, including approval of an expanded Texas City Gulf Coast Reinvestment Zone No. 1 and a commercial-industrial tax abatement for 10 years.
The plant will process anhydrous ammonia, a compressed gas form of ammonia from which all water has been removed.
Texas City Commissioners at their regular Wednesday meeting voted unanimously to approve enlargement of the initial acreage of the zone, including a location for a remote dock to be built by Gulf Coast Ammonia in the Texas City Ship Channel.
The Reinvestment Zone was first adopted by the city of Texas City in May 2017 and was later amended and expanded by city ordinance adopted in December 2017.
The city created the zone for commercial-industrial tax abatement purposes to stimulate investment and promote economic growth.
Gulf Coast Ammonia in 2017 signed an agreement with Eastman Chemical Co. to lease space within Eastman’s Texas City facility, 201 Bay St., to build an anhydrous ammonia shipping and processing plant. Language in that agreement called for $800 million or more in development at the Eastman facility.
Approval of the expanded reinvestment zone means Gulf Coast Ammonia will avoid paying taxes on the property but will pay an amount somewhere between $750,000 and $1 million to the city each year, so long as the property is worth $450 million, said Texas City Mayor Matt Doyle.
If the property’s value were higher, the payment to the city would be the higher amount, Doyle said. The abatement represents a savings of about 60 percent of what the company would otherwise pay in property taxes.
Gulf Coast Ammonia submitted applications for property tax abatement and supplement on May 23 and July 1, according to documents from the company’s attorney, Christopher L. Nichols of Houston, and a legal notice announcing Wednesday’s public hearing was published on July 30.
No one spoke against the proposed plant or the expanded reinvestment zone at Wednesday’s meeting.
“I think they’re very close to getting started on construction,” Doyle said. “We’re hoping they’ll break ground by the end of the year.”
Initial plans indicated construction of the plant would be completed by the end of 2020. Company representatives could not be reached to comment on the new projected completion date.
Gulf Coast Ammonia in 2018 moved through a permitting process with the Army Corps of Engineers showing five alternative plans that, in each iteration, changed the size, location and configuration of the proposed off-shore dock structure in the Texas City Ship Channel.
“They’re very close to getting all the permits in place, but they’re not completely there yet,” Doyle said.
Concerns from the Port of Texas City, the Coast Guard and the Galveston-Texas City Pilots Association were expressed during the public hearing period of the corps’ permitting process.
An earlier proposal placed the dock on the turn of the channel, making it difficult for tugs and barges to navigate at normal speeds. The location is now on the straightaway part of the Channel, away from the turn and offset of centerline by a distance of 526 linear feet, according to corps’ analysis.
The Port of Texas City dropped its objections, said Jason Hayley, director of waterfront operations.
“We came to the conclusion that the proposed plan was OK after the brown water community, a tug and barge group, ran simulations and were able to make maneuvers in and out of the harbor,” Hayley said.
The Galveston County Canal Association and some of its members were involved as well and reported to the port that they’d signed off on approval of the new location, Hayley said.
“Our concern was if it posed a risk and hadn’t been vetted,” Hayley said. “After the trials had been performed, the port had no more objections.”
The offshore dock will be connected to the plant by a pipeline buried beneath the channel. The port had no concerns about the safety of the proposed pipeline, Hayley said.
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.