Imperium third company to explore oil exporting

A third company is preparing plans to potentially ship crude oil out of the Port of Grays Harbor, which is scheduling a public forum on the issue for Jan. 30.

Port commissioners Thursday were told that Imperium Terminal Services LLC, affiliated with the existing Imperium Grays Harbor operation at the Port, wants to exercise a lease option for 11 acres to build a bulk liquid storage facility.

It is similar to a facility being planned for crude oil storage and shipment by Westway Terminals at its site off Port Industrial Road. Westway has applied for a permit with the City of Hoquiam as the lead agency, and the company said in its application that it hopes to begin exporting crude oil from rail to ship by November of this year.

Another company, US Development Group, has been studying the Port’s Terminal 3 since September and will likely decide on the site early next year. The company formed Grays Harbor Rail Terminal LLC and entered into an access agreement on Sept. 11 with the Port to “conduct certain feasibility studies” at the site for a “train/marine crude oil terminal.”

Most of the crude oil would be distributed to West Coast refineries, such as the five in Washington state. Other refineries that would get the crude would be in California or Hawaii, and potentially refineries in Asia.

Before the Imperium plans were discussed, Arnie Martin of the Grays Harbor Audubon Society questioned the impact the Westway proposal would have on rail traffic across Port Industrial Road.

“The site has limited storage capacity, and they are planning on expanding into crude oil export coming in by rail,” Martin said. “Because of the limitations of the site, my understanding is that it’s going to be necessary to block Port Industrial approximately three times a day.”

Port Executive Director Gary Nelson acknowledged there were a number of questions about the ongoing interest in the Port as a crude oil shipping location. As a result, the Port will hold a public workshop at 5:30 p.m. Jan. 30 at the Aberdeen Rotary Log Pavilion. Westway, US Development and Imperium, as well as the Governor’s Office of Regulatory Assistance, the Coast Guard, Greater Grays Harbor Inc. and rail operator Puget Sound & Pacfic Railroad are expected to be in attendance.

“At that time, there will be ample opportunity to ask questions,” Nelson said, telling Martin he did not know the answer to the question posed about rail traffic.

The Imperium plans had not been publicly disclosed until the new lease proposal came before Port commissioners as part of their rescheduled regular meeting on Thursday.

Port attorney Art Blauvelt said the existing lease with Imperium, executed in 2006, gives the company the option to lease the property for the operation of a bulk liquid storage and processing facility.

It allows for the shipping of and receiving of bulk liquids such as crude oil by truck, rail and vessel through the Port’s marine terminal complex, Blauvelt said. The lease would be in effect until 2031. Rent would be subject to fair-market increases, with payments in excess of $10,000 per month, bringing in a total of $129,000 in revenue.

“The property is being leased as-is. The Port will not be responsible for any costs associated with the preparation or construction activities at the site,” Blauvelt said.

It would, however, require fine-tuning an existing rail-use agreement between the Port and Imperium, he said, with a staff recommendation to pass a motion approving the lease as well as the dock use agreement. The commissioners passed it unanimously.

With the disclosure of the Imperium plans, Martin also questioned the cumulative effects of rail shipments of crude oil.

“The Terminal 3 site, we’re talking about two trains a day, two in and two out. My understanding is that at Westway, it’s one train every three days. These cumulative effects to the system are going to be quite interesting,” Martin said.