Galveston Wharves has signed a lease and development agreement with Power LNG, which plans to develop a small-scale, modular liquefied natural gas (LNG) production, storage and fuel bunkering facility on Pelican Island.
The agreement outlines requirements related to government permits and approvals, project financing, rent and other charges, as well as commercial and operating agreements needed to advance the development.
The Galveston Wharves Board of Trustees approved the deal at its October 8 meeting, the port said in a statement.
“This agreement paves the way for the Port of Galveston to play a leading role in providing cleaner marine fuels to the region,” said Rodger Rees, Galveston Wharves port director and CEO.
“The project will create jobs, bring more LNG-powered ships and contribute to improved air quality. Pelican Island, with its deep-water harbor, industrial operations and available acreage, is the ideal location for an LNG facility.”
The 30-acre greenfield development will be located on the east side of an approximately 82-acre, port-owned tract on the deep-water Galveston Harbor.
The planned facility will be capable of producing approximately 400,000 gallons per day using two parallel liquefaction trains, each capable of producing about 200,000 gallons per day.
The start of commercial production is expected in Q4 2028, once the required approvals and agreements are completed, with a possibility of expanding it to 800,000 gallons per day using modular liquefaction technology.
Rees added that the project also positions the port to serve growing demand for LNG as a marine fuel.
“As more LNG-powered ships are built, demand for LNG marine fuel is reaching a tipping point. This facility will give Galveston an opportunity to support this growing market while further diversifying our port’s operations,” he noted.
An underground natural gas pipeline will also be built to provide feedstock to the facility, a 3-million-gallon LNG storage tank, and a shore-to-ship pier to fuel both ships and bunker vessels.
LNG bunkering operations will be coordinated using qualified vessels that may provide LNG fuel to ships calling at the Port of Galveston and other locations in the Galveston, Houston and Texas City ship channels.
According to the statement, the partners also plan to negotiate agreements for LNG and/or ISO tank container loading operations at a future port-owned dock adjacent to the leased property.
Potential future LNG-related activities at other port locations are also envisaged, including ISO container loading and export operations at portions of Pier 34 and truck-to-ship LNG fueling and other early bunkering activities at portions of Pier 39.
