Ports & Terminals

Tallgrass Energy Cancels $2.5 Billion Plaquemines Parish Oil Terminal

A planned $2.5 billion oil terminal in Louisiana’s Plaquemines Parish was canceled after its developer, Tallgrass Energy, faced court challenges and protests following the uncovering of slave cemeteries on the site it planned to develop. 

The news was announced November 19, shortly after Phillips 66 said that its existing refinery in Belle Chasse, Plaquemines Parish’s largest single employer, was shrinking permanently after the company concluded it would be too expensive to repair damage it received to its refinery from Hurricane Ida. The Phillips 66 facility will remain an oil export terminal but will no longer refine product. The conversion to an oil storage and export facility is expected to occur in 2022, the company said. Phillips 66 wrote down the plant’s value by $1.3 billion after attempting to repair it. According to Reuters, the switch will cost about 425 jobs. Phillips 66 had been trying to sell the facility even before Ida hit. 

The proposed Plaquemines Liquids Terminal was a joint development project by Tallgrass with Drexel Hamilton Infrastructure Partners in concert with the Plaquemines Port Harbor & Terminal District (PPHTD). The terminal would have been adjacent to the Mid-Barataria Sediment Diversion, which channels sediment to rebuild eroded coastal land. 

“Integrity and respect are core Tallgrass values,” Tallgrass CEO William Moler said. “As part of our PLT permitting process, our cultural survey work identified a cemetery and potential artifacts consistent with what community members shared about the history of the site. Since then, we reduced our development footprint to protect those areas and engaged with the Ironton [La.] community and other local stakeholders on an appropriate path toward memorializing them.”

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When PLT and PPHTD entered a lease agreement in 2018 to develop the site, both parties agreed to place a conservation easement on 50 acres adjacent to the historic community of Ironton. This easement remains in place and permanently protects the area from any future industrial or commercial development by Tallgrass or others.

“We will be withdrawing the current air permit application and memorandum of understanding with the Coastal Protection and Restoration Authority (CPRA), as they will not reflect the new uses of the site,” Moler added. “Tallgrass will continue to work with CPRA to ensure that any future development on the site is consistent with the state’s Coastal Master Plan.”

Moler left the door open for some other type of development at the site, but it is unclear what form that would take. “We will evaluate a wide range of opportunities other than an oil terminal that can operate within a reduced development footprint at the site,” he said. “We value the continued support of Gov. John Bel Edwards, Plaquemines Parish President Kirk Lepine, members of the Parish Council and the port. Louisiana has a strong economic development culture, and we look forward to being a part of it.”