News
TOPS Files Lawsuit Against Enterprise Offshore and TEPPCO O/S Port for Breach of Contract
20.05.2009 - Houston, Texas:
The Texas Offshore Port System (TOPS) has filed a lawsuit in the Harris County, Texas District Court seeking to require Enterprise Offshore Port System, LLC (Enterprise Offshore) and TEPPCO O/S Port System, LLC (TEPPCO O/S Port) to fulfill their commitments to fund the construction of an historic offshore oil port project.
TOPS states in its petition that, on April 16, 2009, eight months into a 50-year commitment, Enterprise Offshore and TEPPCO O/S Port abruptly withdrew from the TOPS partnership with Oiltanking Freeport, LP (Oiltanking). TOPS contends that the withdrawal breached the TOPS partnership agreement and does not excuse Enterprise Offshore and TEPPCO O/S Port from their commitments to contribute their respective $588 million capital contributions to the project.
On August 14, 2008, Enterprise Offshore, TEPPCO O/S Port, and Oiltanking executed a partnership agreement to design, construct, own, and operate a $1.8 billion offshore oil port in the Gulf of Mexico. Each partner committed to pay an equal one-third portion of the total capital contributions for construction of the initial facilities.
The development of the offshore port system and onshore infrastructure is supported by long-term crude oil throughput contracts with Motiva Enterprises LLC and ExxonMobil Corporation.
TOPS officials say this lawsuit was filed in order to uphold a partner’s commitment under contract. The TOPS initiative is a key U.S. Gulf Coast infrastructure project that will enhance delivery of crude oil to the western Gulf Coast refiners. The merit and demand for this project are not diminished by a partner’s withdrawal. TOPS officials believe strongly in this project because of what it means to the refining industry and the state of Texas, and will continue to fight to see it come to fruition.
About TOPS
The TOPS project will include an offshore port, two onshore storage facilities with approximately 5.1 million barrels of total crude oil storage capacity, and an associated 160-mile pipeline system with the capacity to transport up to 1.5 million barrels per day (BPD) of crude oil. The initiative provides an efficient alternative to offshore lightering and inland dock operations, and will permit environmentally safe transport of crude oil to shore via pipeline.
Refineries of the Texas Gulf Coast process 3.9 million BPD (including planned and announced expansions). Approximately 2.5 million BPD are imported on vessels that require lightering services. The TOPS project offers refiners another delivery option with added flexibility and enhanced reliability, and is needed given the forecasted increased shipping traffic and operating limitations in the ship channels.
TOPS is designed to allow operations 24 hours per day without restrictions on movements and vessel size that limit most ship channels. TOPS will be able to accommodate the largest vessels that can carry approximately two million barrels of crude oil.