Wind Leases May Blow $231 Million Into State’s Coffers

Louisiana-based firm begins research and development on four tracts of land off coast of Galveston.

State Awards Off-Shore Wind Leases to WEST

The Texas General Land Office awarded the first four competitively bid leases for offshore wind power in the nation’s history.

The leases, awarded to Iberia, La.,-based Wind Energy Systems Technology allow work to begin immediately on the construction of meteorological testing towers on each of the four tracts.

The company already holds the nation’s only offshore lease for wind power, and is collecting data for a wind farm off the coast of Galveston.

Once the wind farms are operational, WEST. will pay the state’s Permanent School Fund a minimum of $132 million over the 30-year life of the leases, discounted for the present value of the leases. The company’s actual dollar commitment to the PSF is $258 million. Factor in the Permanent School Fund’s minimum gross revenue from the wind farms producing at 250mw to 300mw, and that total rises to more than $231 million, discounted for present value, or $433 million over the 30-years the leases cover.

Four offshore tracts were offered for wind development as part of the regular oil and gas lease sale held in late 2007. The offshore wind energy tracts are near Jefferson, Calhoun, Brazoria and Cameron counties. The four tracts total 73,098 acres in size. The tracts range in size from 12,240.02 to 23,040 acres.

The research and development stage will last approximately four years and the production term will be 30 years for each lease. WEST will pay the state’s Permanent School Fund $91,000 a year for the right to develop wind farms on the four tracts of land.

Following the research phase of the leases, WEST will begin to develop wind farms on each of the four tracts. If winds are favorable, WEST plans to build wind farms that will produce a minimum of 250 mw to 300 mw per lease.

WEST will then begin paying the state’s Permanent School Fund a percentage of the electricity produced on the leases.

Galveston-Houston Commuter Rail Line Project Examined

The city of Galveston commissioned a study regarding the establishment of passenger rail services between Galveston and Houston with stops in between at key locations.

The Goodman Corp. of Houston is heading up the project team, which includes the Texas Transportation Institute, Carter & Burgess and the Galveston Railroad Museum.

The study was initiated to address growing congestion within the Galveston Houston IH-45 corridor, the need for mobility options, improved emergency evacuation, improvement of freight movement and safety, economic development and job growth in the region. The Union Pacific Railroad, Houston Metro, Houston Galveston Area Council, Texas Department of Transportation and other stakeholders provided input to the study process. The city of Galveston matched federal funds to commission the study.

The 140-year-old Galveston, Houston and Henderson rail alignment, currently owned and operated by Union Pacific Railroad, is the most direct and least utilized of the major freight corridors in the region. Commuter rail services on the track would be a boon to major employment and activity centers such as downtown Galveston, UTMB, NASA’s Johnson Space Center, Ellington Field, Ports of Galveston and Texas City and Downtown Houston.

The preliminary capital cost estimate to upgrade freight and passenger capability along the corridor to accommodate speeds as high as 79 mph, construct stations, provide park and ride facilities, and purchase trains would be in the $380 million to $415 million range, depending on the location of interface with Houston Metro near downtown. When compared to similar commuter rail efforts elsewhere, the Galveston Houston alignment is cost effective. The alternative of carrying the equivalent ridership on a two-way bus lane, operating on IH-45 between Houston and Galveston, would cost in excess of $2.2 billion.

Annual operating cost is estimated at approximately $16 million, which will be offset through fares, revenue from redevelopment around stations, and other subsidies. The estimate includes grade separations at key locations, development of eight stations, electronic train control, and six passenger trains of six cars each. A combination of federal and local resources will be necessary to finance the capital requirements. Daily ridership would begin at approximately 4,200 in 2012 and increase to more than 11,500 passengers in 2030, the equivalent of one additional freeway lane in each direction. 

The next phase of work, which could begin at any time, is alternatives analysis, a required step in the federal funding process, which more fully develops technical, legal and financial aspects necessary for success. 

Dam Award Presented to Round Rock Water Authority

 The Association of State Dam Safety Officials honored industry leaders who made outstanding contributions to the field of dam safety. Award winners were recently presented at the ASDSO Awards Banquet in Austin.

The West Region Award of Merit was presented to the Upper Brushy Creek Water Control and Improvement District in Round Rock.

The Upper Brushy Creek Water Control and Improvement District developed innovative and cost-effective methods to confront the challenge to public safety posed by low-to-high hazard potential dams.

The district’s program has become a model for development and management of a comprehensive dam safety program, demonstrating accomplishments in prioritizing improvements and coordinating activities of multiple municipalities and agencies.

The project includes an innovative "cafeteria plan" concept developed by the state. The plan addresses safety issues with a combination of dam improvements and early warning systems; cost effectiveness with 91% of annual expenditures directed to capital improvements; and coordination among five municipalities, the county, and area emergency management and response officials in developing emergency action plans and development of early warning systems.

The cafeteria plan represents a pragmatic approach that allowed the district to start making improvements immediately. Under the district’s cafeteria plan, some dams will be raised to pass the Probable Maximum Flood, while others will be improved to pass a 22-in. rainfall event- that is, 50% of the PMF. A comprehensive inspection of each facility provided data for prioritizing the improvements. 

As part of the district’s proposed cafeteria plan, the Texas Commission on Environmental Quality required the district to implement early warning systems at any dam unable to safely pass 100% of the PMF. A typical EWS dam installation consists of devices a gauge lake levels, system status and rainfall; a central processing unit that converts this data into digital format; a two-way radio system; radio tower and solar arrays. Data is sent every five minutes to the district’s base stations and is shared with local emergency management and response officials. 

KBR Begins Work on $225 Million Contract for Canadian Plant

Houston-based KBR was awarded a $225 million contract for construction and fabrication of a gasification unit by Lurgi AG, an Air Liquide subsidiary, and a leading international company operating in the field of process engineering and plant contracting. Lurgi is the engineering, procurement and construction contractor to North West Upgrading. KBR’s scope of work will include the fabrication of nearly 100 modules and will peak at approximately 400 personnel performing field construction and module service work on this 30-month project.

The project, located near Edmonton, Alberta, is slated to begin this year with field construction services for the Gasifer unit planned to start in summer, and module fabrication expected to start in mid-2009. Mechanical completion of the Gasifer unit is planned for the first half of 2011.

CB&I Awarded $80 Million Contract for Colombia Refinery Expansion

CB&I of The Woodlands was been awarded a contract by Refinería de Cartagena S.A. for a refinery expansion project in Cartagena, Colombia. CB&I will perform the engineering, procurement and construction on the expansion project, including adding 14 new processing units. The expansion is designed to increase processing capacity at the fully integrated oil refinery from 80,000 barrels of crude oil per day to a total capacity of 150,000 barrels per day. The upgraded facility will produce ultra low sulfur gasoline and diesel from a heavy crude oil slate.

The definition phase of CB&I’s contract is valued at approximately $80 million and includes engineering development and procurement services for equipment and materials with long lead times.