New Black-oil Terminal Wants Refinery Leftovers

A founder of one of the Houston Ship Channel’s largest oil storage terminals is planning a new facility to compete with his former company in the niche market of black oil.

Thirty years in the past, John McDonald began the Houston Fuel Oil Terminal, which is right this moment the biggest handler of heavy refining byproducts referred to as black oil. He bought his stake in the company over time but was an adviser till about 4 years in the past.

His new enterprise, Battleground Oil Specialty Terminal Co., or Bostco, will probably be a 7.8-million-barrel black oil terminal just some miles away from his former company on the Houston Ship Channel.

McDonald won’t yet reveal where monetary backing is coming from for the 187-acre venture, but he said a few of his clients will have an equity stake in the power. About 50 p.c of the planned terminal’s capacity is underneath contract, with interest in the other half close behind.

“We feel adequate about this market to start building with out one hundred % of the facility under contract,” McDonald mentioned.

Black oil is what’s left over after a refinery has gotten all the gasoline, diesel and other fuels it will probably out of a barrel of crude.

It is mainly used as bunker gasoline oil, which runs the engines on large ships and a few kinds of energy plants, notably overseas.One other form of black oil, generally known as carbon black, is used as a feedstock for plants that make rubber and printer toner.

It is a comparatively small market. Shippers handle about 14 million barrels of black oils per day, compared with about 86 million barrels per day for the total world crude market, in keeping with Platts.

The Houston Gas Oil Terminal, the nation’s largest, is a 310-acre assortment of storage tanks and terminals southeast of the intersection of Interstate 10 and Beltway eight on the Houston Ship steam, heat conduction oil jacket heating reaction kettle Channel. That facility has connections to a number of local refineries and pipelines as well as thirteen.Three million barrels of storage capacity.

Congestion a problem

Regardless of its leading position, clients of the Houston Gas Oil Terminal complain the power is congested at instances, resulting in long loading delays for tankers and barges, stated Jennifer Brumback, editor of U.S. Gulf Coast Residual Fuel Market coverage for Platts.

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