Calhoun Port Authority

Calhoun Port Authority

POINT COMFORT — The Calhoun Port Authority entered into a binding agreement with Max Midstream Texas on Wednesday for funding of the Matagorda Ship Channel expansion project.

The memorandum of understanding, which was unanimously passed at a regular monthly meeting, locks the oil and gas company in as the guarantor on bonds that will be issued for construction.

“Basically this has us covered in the event on the bonds being issued to where the Port is not on the hook,” said Port Director Charles Hausmann. “The Port is basically having Max guarantee those payments, but we will be working on other documents in the future to finalize the exact terms of the summary sheet.”

After acquiring the Seahawk terminal and pipeline at the port in the fall of 2020, Max Midstream announced that it planned to invest $1 billion into transforming the port into a major oil exporting center.

The company said that investment would include $225 million for the ship channel expansion, which will enable the company to build out its oil exportation operation, which is already underway.

The Calhoun Port Authority and U.S. Army Corps of Engineers aim to complete the preconstruction engineering and design phase of the ship channel project by December. Both the port and Max Midstream intend to have the definitive agreement completed before then, Hausmann said.

“We want to enter into that definitive agreement before the year’s out because with the project on (the) schedule that it is on, it is going to have to be sooner than later,” he said.

In addition to defining Max Midstream’s financial commitment to the project, the definitive agreement will detail the company’s access to lease of new docks at the port and the dock and wharf fees it will pay the port, according to the memorandum of understanding.

Max Midstream’s financial support of the project will be considered in negotiations of fees and lease access, according to the document. As part of the engineering and design of the ship channel, Max Midstream and the port will also negotiate terms for the company’s access to additional docks that are planned as part of the project.

The board also approved an amendment to a memorandum of understanding with INEOS Nitriles for the potential purchase of the AN/NH3 facility. The agreement was previously approved but was brought back in front of the board because of changes that were made to add clarification.

June 30 marked the end of the port’s fiscal year for 2021. The port handled about 3.65 million short tons of cargo — a 32% decrease from 2020, Hausmann said.

“With the way the world economy slowed down in the spring, we saw that wall and knew it was coming,” he said. “We’re looking to do a lot more than that this next fiscal year.”

The board went into closed session for about an hour to discuss commercial information the port received from a business prospect, the purchase, exchange, lease or value of property, and to seek advice from its attorney.

No action on matters discussed was taken.

Before adjourning the meeting, the board approved payments to board members for attending committee meetings. The elected officials pay themselves $250 per each committee meeting attended in addition to their regular monthly meeting and one special meeting, which they also collect board service fees for.

Luis De La Garza, who was elected to serve as board chairman in May, created several new committees in June and appointed board members to them.

Payments included $250 to Dan Krueger, $750 to Johnny Perez, $750 to Jay Cuellar and $1,000 to De La Garza.

J.C. Melcher Jr. was the only board member to vote against approving the payments, excluding board member Marvin “Marty” Strakos who was not at the Wednesday meeting.

Melcher voted against paying Perez and De La Garza for a port commission meeting at the Port of Corpus Christi, and paying Cuellar and De La Garza for a director and deputy director evaluation committee meeting but declined to explain why.

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Kali Venable is an investigative and environmental reporter for the Victoria Advocate. She can be reached at 361-580-6558 or at kvenable@vicad.com.

Investigative & Environmental Reporter

I was born and raised in Houston, but spent many summers and weekends in the Crossroads while growing up. I studied journalism at the University of Texas at Austin, and feel lucky to cover a region I love dearly.