By Joshua Mann | Reporter, Houston Business Journal | June 22, 2018 (Houston Business Journal) –
Houston-based Caliche Development Partners plans to expand its Beaumont terminal with a 5 million barrel ethane storage cavern.
It’s the latest in a series of projects that make up Caliche’s Coastal Caverns storage hub, a salt dome cavern facility meant to have up to 32 million barrels of capacity when it’s done.
The hydrocarbon storage company started out with access to more than $200 million in financial backing from Dallas-based Energy Spectrum Capital LP, said CEO Dave Marchese. While Marchese declined to comment on the cost of its upcoming expansion, he said the full Coastal Caverns buildout would use up its remaining funding from Energy Spectrum and require Caliche to take on debt, something it is looking at now.
Marchese said that when Energy Spectrum and the management team founded Caliche two years ago, his company saw a need for storage capacity around Houston’s growing collection of ethane crackers.
“We didn’t believe there was enough storage capacity to support those crackers on either side,” Marchese said. “We saw an opening in the market for an independent storage provider to come in.”
Work on the latest cavern is set to begin right away, and Marchese said he expects it to take about 16 to 18 months for construction and start up.
In many midstream projects, companies will wait until their customers make binding commitments before they build an asset, but Marchese said he wants to meet his customers half way.
“I think that we view our partnership with our customers as one that requires commitment on both sides,” Marchese said. “We see the need in the market.”
Caliche is in active negotiations with some of the larger ethane crackers in the area, Marchese said.
Caliche is looking at both organic and inorganic growth as it moves forward, and it has six more permitted sites at the Beaumont facility, Marchese said.
Marchese declined to comment on his company’s revenue, or whether or when it might be cashflow positive.