HOUSTON (Reuters) - A unit of asset management firm Carlyle Group LP this week will appeal to the Trump administration to guarantee a two-year approval of its South Texas crude export project, officials said.
Carlyle-backed Lone Star Ports LLC is vying to open the first new U.S. crude export facility that can fully load supertankers, which will require dredging a South Texas ship channel deep enough to allow fully loaded supertankers to maneuver at its planned terminal.
The company plans to file paperwork with the administration’s Federal Permitting Improvement Steering Council (FPISC) to join a list of infrastructure projects that U.S. officials hope to ease through federal, state and local reviews.
Carlyle has not yet made a final investment decision on a $400 million project to dredge a portion of the Corpus Christi, Texas, ship channel to a depth of 75 feet to accommodate supertankers that carry up to 2 million barrels of crude.
In March, the U.S. Army Corps of Engineers, which issues permits for dredging projects, recommended a full environmental impact statement (EIS) for Carlyle’s project. An EIS typically can add two years, if not more, to the timeline of a project, officials said.
Carlyle had sought to complete a shorter review, called an environmental assessment, which can take as little as a few months.
The dredging project is more likely to move forward once it is added to the FPISC’s list of high-priority ventures, said Jeremiah “Jerry” Ashcroft, chief executive officer of Lone Star Ports, which will operate the planned terminal on a harbor island near Corpus Christi.
“To have clarity on timing is extremely helpful for us,” particularly because outside investors are typically leery of projects subject to environmental reviews that could add years to a regulatory approval process, Ashcroft said.
Carlyle is in discussions with three companies to sell a 25% stake in the export project for a total of $625 million, according to a source familiar with the matter.
Carlyle is also in talks to jointly operate a crude oil pipeline from Houston to Corpus Christi, the source said. A deal with one of the three companies could happen as early as Friday, according to the source.
U.S. oil exports rose to a near-record of about 3.4 million barrels a day (bpd) last week, according to the U.S. Energy Department.
Carlyle’s Lone Star has spent $250 million on its planned $800 million terminal, expected to begin operations in October 2020, exporting 1.4 million barrels per day.
Reporting by Collin Eaton in Houston; Editing by Jeffrey Benkoe
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