|
|
|
|
Foreign Trade Zone, Inc. 12292 Intraplex Pkwy Gulfport, MS 39503 Phone (228) 896-5020 ftz@mscoast.org |
Full 2002 FTZ Report ANNUAL REPORT MISSISSIPPI COAST FOREIGN-TRADE
ZONE NO. 92 PART History Foreign-Trade Zone No. 92 was approved by Board Order No.
232 on Manufacturing authority was granted to Friede Goldman
Offshore (now known as VT Halter Marine, Inc.) by Board Order 1001 on At the end of the report period, the General Purpose Zone consisted of 13 sites, designated as follows:
Marketing During the FY 2001-2002, the Ports of Gulfport, Zone Report. Although General-Purpose Zone activity
dropped during FY 2002, the Zone project as a whole continued to demonstrate
the positive economic effects of the U.S. Foreign-Trade Zones program along the
Subzone 92-A includes four sites in
Ingalls Shipbuilding, acquired by Northrop Grumman in 2001 and operator of Subzone 92-B, is a major high-tech manufacturing firm that specializes in high-tech defense systems, shipbuilding, and information technology equipment. The Northrop Grumman subzone operation continued its project of upgrading two frigates for the Venezuelan Navy under a $315 million contract; however, activity on its cruise ship construction project was suspended because of the bankruptcy filing of the cruise ship owner. The company completed a two-year, $130 million facilities construction program on the West Bank that has generated more than $70 million in contracts to dozens of construction firms and material/services suppliers, which at peak involved more than 1,000 construction jobs. Regular employment exceeds 10,000. Northrop Grumman, operator of Subzone 92-C, remained activated during the report period, but processed no foreign status merchandise. This 122-acre facility was very active in construction of barges during FY 2002, but no production was related to a specific FTZ project. Employment totals 298 people. Chevron Products Company’s refinery in Pascagoula is operated as Subzone 92-D. The utilization of Zone procedures is enabling this petroleum refinery to remain competitive with other refineries worldwide. The Chevron refinery includes approximately 3,100 acres where over 300,000 barrels of crude oil are processed daily. The plant employs approximately 1,200 people and 1,500 skilled and professional contractors. During the year, FTZ No. 92 continued to employ the Foreign Trade Zone Corp. to assist the administration, marketing, and development of the Mississippi Coast Foreign Trade Zone project. Since it began managing the FTZ No. 92 project, the FTZ Corp. has been very instrumental in assisting the Zone expansion application process, the activation of Subzone 92-C for Avondale, gaining manufacturing authority on the expedited minor boundary modification for Friede Goldman Offshore located on Greenwood Island, and two other temporary minor boundary modifications for Ingalls Shipbuilding and Airmar Resources, respectively. FTZ No. 92 is very confident that the ten-year consulting agreement with Foreign Trade Zone Corp. will continue to yield significant Zone-related economic benefits. Liner Services, Inc. served as the agent and supervisor of operations for Duratex North America, Inc., a major wood products importer operating within the General Purpose Zone area at the Mississippi State Port at Gulfport. The Duratex activity continues to be very successful, largely because of the combined efforts of the Mississippi Coast Foreign Trade Zone, Inc. and the Foreign-Trade Zone Corporation’s work with U.S. Congress to enact the Expanded Weekly Entry provision as part of the Trade Development Act of 2000. The Weekly Entry provision guarantees that all Zone operations, including distribution operations such as Duratex, may continue to avail themselves of the logistical efficiencies provided by the U.S. Foreign-Trade Zones program. With a growing area economy, the Board of Directors of FTZ No. 92 looks to continue the expansion of Zone activities in south Mississippi during the year 2003. As noted in previous annual reports, the Grantee organization of FTZ No. 92 has 5 corporate members. Following are reports concerning each member’s general activities: Airport Report The Airport has 1,579 acres of property with another
100 acres in easements and 717 acres in the FTZ. The Airport purchases additional land and
easements every year to protect existing and future approaches. In the Terminal area, approximately 170 acres
are available for expansion of the existing Terminal, construction of
additional terminals, landside facilities and aircraft parking ramps. The Gulfport-Biloxi International Airport has grown
significantly over the last ten years.
The Airport handled a total of 949,229 passengers in calendar year 2000,
879,304 in 2001 and 816,653 in 2002. The
Terminal facility was doubled in size in 1998, which allowed the Airport to
accept two additional airlines, and in 2003 an additional 40% expansion is planned. Five commercial airlines currently operate at
Gulfport-Biloxi International Airport.
AirTran Airways and ASA/Delta provide jet service to Atlanta. AirTran also serves Ft. Lauderdale and Tampa
non-stop. Continental provides daily jet
service to Houston. Southeast Airlines
provides jet service to St. Pete/Clearwater and Orlando/Sanford, and Northwest
Airlines provides several daily jet flights to the Memphis hub. Additionally, charter airlines support
commercial and military passenger demand with weekly flights to several
cities. The Airport is aggressively
pursuing jet service from several airlines, including international passenger
charters to Canada and charter flights to Europe and Latin America. As for runways, the Airport has Runway 14/32, a
9,000-foot long all-weather jet runway, which is the longest in the
region. This runway routinely
accommodates B747 and L1011 aircraft operating on intercontinental
flights. Both the military and
commercial charters regularly operate these large aircraft. The second runway, 18/36, is currently 5,000
feet long, and land acquisition is underway that will allow extension of the
runway to 7,000 feet. This runway
extension is targeted to begin in five years.
Moreover, the Airport Master Plan has indicated that the Airport has
sufficient land to construct a third runway, parallel to Runway 18/36. Airport operations (a landing or take-off) currently
averages 342 per day, or about 19 per hour based on an 18-hour day. Runway capacity is available to allow at least
two times that number, up to 720 operations per day. As aircraft operations increase, aircraft
size also increases. Therefore, the
Airport can accommodate a substantially greater number of passengers with only
a marginal increase in number of operations.
In any event, the Airport is currently operating at less than 50% of
capacity. Over 120 acres of Airport property is earmarked for
cargo and general aviation and is now under development. The first cargo operation has opened for
operation by Transport Specialists, Inc and occupies approximately five
acres. This facility provides both
domestic and international cargo service capabilities in the FTZ. The Air National Guard Combat Readiness Training
Center at the Gulfport-Biloxi International Airport is second to none in the
nation. Military traffic and training is
growing each year. More than 18,000 Air
Guard and Reserve personnel trained at the base last year. Within 10 minutes, supersonic aircraft can
operate in a combat environment over the Gulf or Camp Shelby is Hattiesburg. General aviation activity operated by FBO AvCenter
is a major contributor to the Airport’s aviation service resource. The FBO AvCenter is growing steadily and
provides fuel, maintenance, and aircraft service for all users, including the
expanding charter airline operation. In sum, the Gulfport-Biloxi International Airport
has the land area, zoning, runways, instrument approaches, and the master plan
in place for development that will allow continuous and positive growth of
passenger, cargo, military and general aviation over the next 30 years and
beyond. Over the last ten years, the
Airport’s economic impact has increased from $100 million to more than $600
million annually. Hancock County
Report
Port Bienville was established in 1962 under the jurisdiction of the Hancock County Port and Harbor Commission. The organization is governed by seven (7) Commissioners, and daily operations are managed by an Executive Director and staff of 35. The County Board of Supervisors appoints five of the seven Commissioners, and each of the cities of Bay St. Louis and Waveland appoints one. The Commission operates the Port Bienville Industrial Park, the Stennis International Airport and Technology Park, and the Port Bienville Short Line Railroad. During fiscal year 2002, the Commission participated in 5 trade shows, including trade missions to Merida, Mexico, and Toulouse, France. These activities are part of the new marketing plan the Port and Harbor Commission developed to attract new businesses and industry to the Mississippi Gulf Coast. The Port and Harbor Commission secured over $5.9 million in grant and low-interest loan funding for capital improvement projects at Port Bienville and Stennis Airport during 2002. Port Bienville Industrial Park is a shallow draft port located in Bay St. Louis, Mississippi, in the southwestern portion of the state on the Gulf of Mexico at latitude/longitude 89° 40'/39° 14'. A 12-foot channel connects Port Bienville to the Mississippi Sound and the Intracoastal Waterway. Port Capabilities
Port Bienville’s water, rail and vehicular intermodal capabilities include:
Services offered at the port include:
The Port and Harbor Commission secured $ 610,000 from the Mississippi Department of Transportation to build a new Container Transfer Facility at Port Bienville Industrial Park. This new intermodal yard will increase the port operator storage capacity by 100 %, and will provide a secure state-of-the-art facility able to cope with new port regulations and future growth. According to the Journal of Commerce, Linea Peninsular, the company operating Port Bienville, moved 39,192 TEU’s during the past year, representing a third of the total cargo moved by the Port of Gulfport and almost 20,000 TEU’s more than the Port of Mobile. The Port is serviced by its own railroad, Port Bienville Short Line Railroad, and had over 20,000 interchanges and moved over 1.5 billion pounds of material for park tenants during 2002. The Port’s access road connects directly to U.S. Highway 90, and is 10 miles from Interstate 10 and 18 miles from the intersection of Interstates 10 and 59. Ample land is available for industrial development at Bienville, with 250 acres available on terminal and 700 acres off terminal. Available acreage includes 621 acres in FTZ No. 92. Linea Peninsula, operator of Port Bienville’s ship terminal, is the 44th largest container shipper in the world. Stevedore Services of America operates the Port Bienville bulk barge terminal. Port Commodities and
Industries Port Bienville handles a variety of commodities, including: twine, textiles, apparel, pulpwood, coal, general cargo, ferric sulfate, pressure vessels (reactors), lumber, structural steel and USDA food products. Major tenants involved in international trade at the Port include:
Of the existing Port tenants, potential zone users are: Calgon Carbon Corporation, Con-Tech Power Systems, G.E. Plastics Company, Linea Peninsula, Wellman of Mississippi, Inc., Polychemie, and Eaglebrook. Competitive Advantage
The competitive advantage offered by Port Bienville not available elsewhere in the region is the degree of logistical support in moving goods, particularly the “door to door service” of the niche cargoes. The Stennis International Airpark consists of 100 acres
accessible by four-lane State Highway 603 and Interstate 10. The Airpark's
main access road is 24 feet wide, and all roads within the airpark are designed
to 80,000 lb. load limit
specifications. Utilities available
include 3-phase electric power, water, sewer and natural gas. Land at the airpark is available for lease or
sale. The Port and Harbor Commission has
funds available for special infrastructure needs, such as the construction of
additional warehouse or hangar space. Memphis International Corporation will establish a
Maintenance Repair and Overhaul facility at the Stennis Airpark in 2003 to
refurbish C-130 military aircraft.
Memphis International will employ 40, and could be a pontential user for
the FTZ in the near future. Stennis
International Airport, adjacent to the Airpark, has the third longest runway in
the state (8,500 feet grooved and lighted), with 8 acres of paved aprons, over
50,000-square-feet of maintenance hangars and 24 T-hangars. Plans include constructing additional individual
private hangers. The airport also has an
Automatic Weather Observation System (AWOS).
An Instrumental Landing System (ILS) has been installed and will be
commissioned by the end of January 2003.
The
Airpark's fixed base operator (FBO) provides maintenance services and maintains
aviation gasoline (100 LL) and jet fuel facilities with a capacity of 50,000
gallons. Ten Airpark
tenants employ over 75 people. Airpark
Industries Stennis International Airport is home to a
variety of industries. Major tenants
involved in international trade at the airport include: ·
Aircraft
Packaging, which disassembles, packages and ships aircraft to around the world ·
Hot Sticks
Manufacturing Company, Inc., a major producer of drumsticks ·
Koeing-Stainless,
Inc., fabricator of custom stainless steel galleys for ships ·
Pan-American
Insulators, producer of power transmission hardware The John C. Stennis
Space Center (SSC), a
unique federal facility managed by NASA, encompasses 13,800 acres within a
125,000-acre buffer zone in the heart of Hancock County. SSC is NASA’s lead center for rocket
propulsion testing and remote sensing applications, research and
development. Commercial entities are now
locating at SSC due to many technical services available on site. SSC is also home to
the Naval Meteorology and Oceanography Command, which ranks among the top five
worldwide in supercomputing capability. More than 30
federal, state, academic and private companies are also tenants at SSC, with a
workforce of approximately 4,500 employees, including more than 1,600
scientists and engineers. In addition to
maintenance, administrative, and other support services, MSAAP shares an
on-site fire and emergency response team which is manned twenty four hours a
day, in addition to a gated entrance for security.
Hancock County Job Growth and
Investment since 1996
Harrison County Development Commission Report
The Harrison County Development Commission (HCDC) is a founding member of the Mississippi Coast Foreign Trade Zone Corporation and participates with transportation and economic development agencies in Hancock and Jackson Counties in the operation of Foreign Trade Zone No. 92. Two of Harrison County’s four industrial parks are designated as Foreign Trade Zones. These parks – the Bernard Bayou Industrial District in Gulfport and the Long Beach Industrial Park – total over 2,100 acres and are home to 90 companies that employ over 4,470 people. In support of FTZ No. 92 and international trade, HCDC facilitated several activities in Fiscal Year 2002 including an international sales mission, the development of the Mississippi Coast Trade Council, and participation in both the International Trade Club and World Trade Center of New Orleans. In 2002, the Development Commission participated with the Mississippi Development Authority in a European sales mission and the MIPIM tradeshow in France. The agency also continued to explore trade opportunities with Cuba and established the Mississippi Coast Trade Council as a non-profit corporation to assist area business entities in obtaining the necessary licenses to conduct business with Cuba under new humanitarian trade guidelines. As a result of international business recruiting activities, Future Pipe Industries, a leading manufacturer of high performance, anti-corrosive pipe systems, announced they would locate their first U.S. plant in Harrison County in November 2002. The $7.5 million project will create up to 300 jobs over a five-year period, with an average wage of $14 per hour. The plant will be located on a 32-acre site in the Bernard Bayou Industrial District. A groundbreaking ceremony for the new plant is anticipated in mid-2003. In addition to international prospecting, the HCDC staff met and conducted extensive follow-up with 115 active prospects, whose projects ranged from automotive component manufacturers to major distribution facilities. Industrial prospect activity grew significantly in 2002, especially in the international arena, as a result of continued trade missions to Europe and new markets like Cuba. As a result, the HCDC staff hosted 16 corporate site visits in 2002. The year 2002 yielded several new Harrison County locations and expansions. Over $52 million was invested in capital improvements, with 86% invested by existing companies’ expansions.
In Fiscal Year 2002, the Harrison County Development Commission also completed several capital projects in its area industrial parks. These projects included: A 750 linear foot barge berth was completed in Port
Intraplex, located in the Bernard Bayou Industrial District. The $1 million project was fully leased upon
completion. The primary purpose of the berth
is to accommodate companies who may only need access to the Industrial Seaway a
few times a year, or temporarily. In
2002, the lay-down area was expanded to facilitate temporary storage needs of
current and future tenants. The Long
Range Capital Projects plan includes further expansion of the berth as well as
construction of warehouses. Industrial Seaway Siltation Basin, GulfportA siltation basin project was recently completed in the Industrial Seaway located in the Bernard Bayou Industrial District. The basin was dredged to 20 feet at the head of the Seaway to collect sediment before being deposited into the navigable waterway. The total project cost was $300,000. Long Beach Industrial Park Road ProjectThe entire road system in the Long Beach Industrial Park received a face-lift in 2002 with a park-wide overlay project. The $80,000 project will ensure Oreck, Triton and other LBIP companies will have safe and easy access to their facilities. BBID
Water System Improvement Project, Gulfport To continue to provide uninterrupted water and sewer service to the businesses in the Bernard Bayou Industrial District, a major upgrade and expansion project was completed in 2002. The $425,000 project increased capacity as well and extended service throughout the park. BBID
Drainage Project, Gulfport To complement the almost complete Cowan-Lorraine widening project, the Development Commission undertook a comprehensive, multi-year drainage project. Phase I, which totaled over $150,000, focused on the eastern end of the Park. The final phase is expected to be completed in 2003. Business Technology Center Expansion Due to continuing demand, the Business Technology Center was expanded by 9,600 square feet of manufacturing space at a cost of $540,000 in FY 2002. The Development Commission is currently studying the feasibility of developing another incubator facility in the Long Beach Industrial Park. To ensure there is adequate land and resources for industrial businesses to grow, the Harrison County Development Commission completed year four of a long-range capital projects program. The following projects are programmed for FY 2003 and beyond:
In addition to traditional business recruitment activities and capital projects, the Harrison County Development Commission worked with community leaders on initiatives in the areas of affordable housing, smart growth, and workforce development in FY 2002. The HCDC staff also participated in over 280 community activities, meetings, and presentations in 2002. Finally, the agency continued to help coordinate the activities of several important organizations including the Mississippi Gulf Coast Manufacturer’s Association, the Industrial Park Business Association, the Mississippi Gulf Coast Economic Development Council, the Mississippi Gulf Coast Alliance for Economic Development, the Mississippi Coast Technology Council, the area Council of Governments, and the region’s strategic planning initiative, Coast 21. Jackson County
Port and Harbor Report Jackson County is the most industrialized county in the State, with particular emphasis on port related industries including shipbuilding, oil and chemical industries, fertilizer production, U.S. Navy, and public port operations. Many of these industries rely heavily on international markets for trade and/or product distribution. These port-dependent industries provide over 23,000 direct jobs and are vital to the economic well being of Jackson County, the region, and the State of Mississippi. Many of the industries located within the Port of Pascagoula operate their own private terminals, and most of the traffic and tonnage through the port is handled at private facilities. More than 28 million tons of cargo was shipped through the port in FY 2002, including 612,000 tons through the Jackson County Port Authority’s public facilities. In FY 2002, the port had 525 commercial (cargo) ship calls, with additional traffic from the U.S. Navy, offshore, and shipbuilding industries. Products handled at the private terminals include crude and refined oil products, phosphate rock and fertilizer, and chemicals. The Russian, Central and South American, Caribbean, and Far Eastern markets remained important to the success of the JCPA’s Public Terminals in FY 2002. Major commodities shipped through the JCPA’s public facilities included frozen poultry, paper and lumber products, natural rubber, chemicals, feed grains, and project cargoes. Port staff was reorganized in 2002 and a Manager of Trade Development was added to the organization. A Miami resident was hired to fill this new position, and the decision was made to keep this person in Miami, effectively opening a Miami office. With the expectation that the Latin-American markets present the highest growth potential, a Miami-based Trade Development Manager should be an effective strategy. Facilities rehabilitation work continued in 2002, including the replacement of the Bayou Casotte fender systems and replacement of Terminal “B” roofs. Progress was made on the redevelopment of the grain elevator site in the West Bank Harbor. In the summer of 2002, a contract was let for the demolition of the grain elevator. This contract will remove the grain elevator, storage silos, and all associated out-buildings and equipment. Work on this contract is expected to conclude in January 2003. Removal of the grain elevator will open the last remaining large tract of property on the deep-draft channel for development. This site includes 2500’ frontage on the 38’ depth Pascagoula River Channel and more than 50 acres of property for development. The Port has received interest from several companies on the redevelopment of this site.
The Phase II Harbor Improvement Project was completed in November 2001. This project widened the Bayou Casotte Channel from 225’ to 350’, deepened the entrance channel from 40’ to 44’, and deepened the Sound Channel and a portion of the Bayou Casotte Channel from 38’ to 42’. Chevron, operator of Subzone 92-D, was the first industry to take advantage of the improved channel, bringing in larger and deeper tanker traffic into the Port in FY 2002. Construction of a new dredge material disposal site for the Bayou Casotte Harbor is expected to begin in the summer of 2003. Task Force work on JCPA’s “Special Area Management Plan”, continued in 2002. This task force began meeting in 2000 to address future development and long-term (25 - 30 year) dredge disposal needs in the Pascagoula River Harbor. This multi-agency task force includes representatives from federal, state, and local agencies, as well as local industry. The goal of the task force is to establish a balance among the competing interests in coastal areas, taking into consideration the diverse ecological values of wetlands, the need for maintaining industrial requirements including long term disposal of dredged material, and the importance of wetlands to the fisheries industries. In 2002 the Jackson County Port Authority completed the sale of the Sunplex Industrial Park water system to the City of Ocean Springs. The sale of this system will benefit the Port by freeing additional resources to focus on port activity. The additional capacity will benefit the City of Ocean Springs as that community continues to grow. In 2000
the JCPA, along with Board of Supervisors, County Chamber of Commerce, and
Ocean Springs Chamber of Commerce, established the JCEDF, Inc. (Jackson County
Economic Development Foundation) as an autonomous, private development entity
to serve as the County’s lead economic development agency. The Foundation is a
public-private partnership designed to represent the County’s coordinated,
sustained, approach to economic and industrial development. In 2002 the JCEDF completed a capital campaign that has netted almost $3.8 million in investments from both the private and public sectors throughout Jackson County. The campaign, called Partners in Progress, launched in April of 2002, was intended to raise the financial resources necessary to implement the JCEDF Five Year Economic Development Strategy. The ambitious plan, developed by a team of over 150 public and corporate sector officials, calls for medium and long range programs in seven key areas: marketing and recruitment; site and infrastructure development; retention & expansion of existing industry; strategic alliances; transportation; and communications and investor relations. In
addition to the program of work, the Jackson County Economic Development
Foundation, Inc. has been tasked with the management of the two county-owned
industrial parks: Sunplex Light
Industrial Park and Stennis Industrial Park.
Significant infrastructure and site improvements at Sunplex were
completed in 2002. Sunplex has
approximately 60 available acres.
Stennis does not have any county-owned available property, but will soon
be marketing privately owned available acreage.
Minor aesthetic improvements will be occurring at Stennis over this
fiscal year. In 2002 the JCEDF identified several properties conducive to
industrial development. In some cases, property options have been secured. The JCEDF hopes to exercise those options in
2003 and begin the real property development process. MS State Port ReportThe Mississippi State Port Authority is an Enterprise Agency of the State of Mississippi and is governed by the Mississippi State Port Authority Board of Commissioners and the Mississippi Development Authority. The Port’s five member Board represents a cross-section of Harrison County and the City of Gulfport. The members are appointed to staggered, five-year terms. Three members are appointed by the Governor, one by the Harrison County Board of Supervisors, and one by the City of Gulfport. As an Enterprise Agency of the State, the Port Authority receives no annual general fund allocation from the Mississippi Legislature. Instead, the Port operates much like a private business in that it must plan and set its budget based upon projected and actual revenues. The Port Authority derives these revenues from port usage and service fees, lease agreements and other service provisions. The Port of Gulfport is a full service commercial, deepwater port with container, break bulk and bulk cargo handling capabilities. The Port is located in the General Purpose Zone and is an integral partner in the Mississippi Coast Foreign Trade Zone project. Gulfport has continued to maintain its position as one of the top two ports in the United States for the import of bananas and plantains. As such, the Port of Gulfport also continues as one the top overall tropical fruit importers in the U.S. The Port is the primary U.S. Gulf import and distribution center for Dole Fresh Fruit, Chiquita Brands and Turbana Corporation. Other major imports include knit and woven apparel, mineral ores, lumber and other forest products, aluminum and steel. The number one export product through Gulfport has been frozen poultry destined to the Baltic Regions. Other exports include cotton, paper products, textiles and apparel. Primary trading partners include Honduras, Mexico, Costa Rica, Guatemala, El Salvador, Columbia, Brazil and Cuba. In December 2001, the Port of Gulfport was the first port in the U.S. to ship commercial goods to Cuba since implementation of the trade embargo nearly forty years ago. With the support and hard work of one of the Port’s tenants, Crowley Liner Service, the Cuban market has continued to grow. Export cargo to Cuba this year exceeded 20,000 tons. The Port concluded its Fiscal Year 2002 with a cargo throughput of 2,133,486 short tons. This number represents 1,212,458 short tons of import cargo and 921,028 of export cargo. The FY ‘02 numbers represent an approximate 8 - 9 percent increase over the previous year totals. The cargo was moved by the 352 vessels that served the Port during the fiscal year. The Mississippi State Port Authority has also continued its role as one of the top U.S. ports in value of cargo moved and is the third largest container port in the Gulf of Mexico. The Port of Gulfport continued to make significant progress in the implementation of its capital improvement program, which is valued at over $200 million. A 50,000 square-foot warehouse facility on the East Terminal was opened this spring, and by the end of the calendar year, the Port is expected to take possession of the new $15 million pier extension on the West Terminal. Several other major rehabilitation projects were either initiated or completed during 2002. The design for a 60-acre expansion on the West Terminal should be completed by the end of the year with an expected construction start in the spring of 2003. To provide growth and marketing strategies for the next 10 - 20 years, the Port Authority engaged the firm of Jordan, Woodman and Dobson to update the Port’s adopted strategic master plan. The plan will provide a phased execution approach to a new comprehensive land use and maritime facility development concept. The new master plan will be completed first quarter of 2003. The Port Authority also entered into an agreement with and provided funding to the U.S. Army Corps of Engineers for the initiation of the feasibility study to widen and deepen the Port’s federal access channel. The analysis was enabled by the Water Resources Development Act (WRDA) of Fiscal Year 2000. The study will review widening the channel from its authorized width of 300 feet to 450 feet and deepening from the current authorized depth of 36 feet to 45 feet. The Port of Gulfport is profitable, self-sufficient U.S. Port Authority. It handles more than 2 million tons of cargo annually at public terminals and is an essential and vital force for the overall economic growth of the State of Mississippi. PART II. USE
OF ZONE BY BUSINESS FIRMS (General Purpose Zone No. 92) A.
The Zone served four (4) business firms during fiscal year 2002. Three (3) business firms used the Zone on a continuous
basis, employing approximately 3,500 persons full time. Product operations carried out in the Zone
included: Site 1 – Port of Gulfport – Duratex North America – Hardwood storage, distribution, and inventory. Temporary Modification of Site 4 – Airmar Resources – Vehicle storage. Sites 6 and 7 – Greenwood Island and Pascagoula West Harbor – Friede Goldman Offshore – Shipbuilding and construction of offshore drilling platforms. Site 7 – Kelly Street (Pascagoula East Harbor) – Noskab – Electrical cable distribution for the Shipbuilding industry. Below is a summary of each firm’s use of the General Purpose Zone: Duratex North
America, Inc. (Site 1) Duratex experienced a full year of shipment of their painted Doorskins to their largest customer’s plant during 2002. The program was successfully implemented with very few problems. This type of product, as well as other painted offerings, will position Duratex to expand its customer base with even more activity projected out of this Port during 2003. The Port of Gulfport provided a new facility for the Duratex FTZ operations. The building was adjoining the old facility and is providing the same amount of square footage (50,000 square-feet in the FTZ warehouse and 25,000 square-feet in-transit area). A request to activate the new facility and deactivate the old facility was handled and approved during this fiscal year period. Airmar
Resources (Temporary Modification of Site 4) Airmar Resources, Inc. continued to use the Zone to
store Russian and East German origin trucks under Zone-restricted status
pending physical exportation. These
vehicles were imported originally under bonded warehouse and TIB
procedures. Due to unforeseen events,
the anticipated exportation could not be accomplished within the 5-year bonded
warehouse time limit, therefore Zone status has been employed in order to allow
their continued storage pending exportation or destruction. Friede
Goldman Offshore (Sites 6 and 7) Friede Goldman Offshore, Inc. uses the General Purpose
Zone to conduct engineering, upgrade, conversion of semi-submersibles, jackups,
drill barges, package drill rigs, drillships and submersibles. Friede Goldman suspended construction on the Amethyst Semi-Submersible
Drilling Unit in April 2002, as a result of Chapter-11 filing. The contract was rejected and consequently
awarded to a construction company in Maine.
All materials, subassemblies and partial structures were transferred to
the new company. In addition to the ongoing conversion of the Noble Drilling
Unit Clyde Boudreaux, Friede Goldman Offshore, Inc. (FGO) and Noble Drilling
Corporation signed contracts for the refurbishment of two semi-submersible
pentagon-drilling units. The customer of
these foreign flag drilling units benefit from Zone status by having their
vessels entered as privileged foreign thus allowing duty free entry of removed
materials. As the remaining division of
Friede Goldman Halter, Inc., FGO is expected to be purchased by a new company
at the beginning of 2003. It is anticipated
that the new company will continue operating the Foreign Trade Zone. Noskab (Site 7) Because of the aforementioned suspension of Ingalls’ cruise ship project, Noskab closed its FTZ distribution operation. All Zone status merchandise was forwarded to the Ingalls subzone. PART III. MOVEMENT OF MERCHANDISE (General
Purpose Zone No. 92) A. Merchandise in the Zone at Beginning and End of Fiscal Year Beginning Ending Value Value Domestic Origin/Duty Paid $239,763,431 $253,561,989 Foreign Status $168,312,389 $225,077,289 Total $408,128,927 $478,639,278 B. Movement of Merchandise Received Value Domestic Origin/Duty Paid $13,745,451 Foreign Status $82,705,753 From U.S. FTZ's Domestic Status $ 0 Foreign
Status $ 0
Total $96,451,204 Forwarded
To U.S. Market $25,544,173 To Foreign Countries (Exports) $ 0 To Other U.S. FTZ's _$396,680 Total $25,940,853 C. Value Added: Estimated amount of value-added activity within General Purpose Zone 92 was approximately $25 million. D. Main categories of Foreign
Status Merchandise Received (Top Four) Item Value 1.
Drillships $ 76,000,000 2. Hardwood $
6,018,154 3. Joiner/Insulation $ 471,584 4. Marine
Structures $ 216,015 Total $ 6,705,753 E. Non-Privileged foreign merchandise received
during this fiscal year amounted to $6,705,753 in value. Privileged foreign merchandise received
during this fiscal year amounted to $76,000,000 in value. F. Customs collection of duties on merchandise
entered from the Zone during this fiscal year was $59,824. PART IV. PHYSICAL FACILITIES – AVAILABLE AND
ACTIVATED General
Purpose Zone: Site 1 - Port. MS State Port Authority at Gulfport, 167 acres; activated –
Duratex North America as the operator; 150,000 square-foot warehouse located on
East Pier at the Port of which 50,000 square-feet is activated. Site 2 - Airport. Gulfport-Biloxi Regional Airport in Gulfport;
717 acres; not activated; international cargo base is open for business. Site 3 - Bernard Bayou. Bernard Bayou Industrial District in
Gulfport; 2,363 acres; a portion of the site is activated as the VT Halter
Subzone 92A; multiple dock, wharf and warehouse facilities. Site 4 - Long Beach. Long Beach Industrial Park in Long Beach; 484
acres. Currently deactivated. Site 5 - Trent Lott International Airport. 254 acres; not activated; Airport and
industrial park facilities available. Site 6 - Greenwood Island. 148 acres; activated; Friede Goldman as
operator; shipyard for construction of vessels and offshore drilling rigs. Site 7 - Pascagoula East and West Harbors. 193 acres; activated; Friede Goldman
and Noskab as operators; shipyard for construction of vessels and offshore
drilling rigs; marine electrical cable distribution. Port and warehouse
facilities available. Site 8 – Stennis Industrial Park. 283 acres; not activated; Industrial park
facilities available. Site 9 – Heinz Property. 13 acres; Currently deactivated. Site 10 – Sunplex Industrial Park. 65 acres; not activated; Industrial park
facilities available. Site 11 – Port Bienville. 621 acres; not activated; Port and industrial
park facilities available. Site 12 – MSAAP. 87 acres; not activated; Industrial park
facilities available. Site 13 – Stennis Airport. 67 acres; not activated; Airport and
industrial park facilities available. Subzones: 92-A VT Halter Marine. Halter Marine in Gulfport; 30 acre site –
activated; 20.85-acre Halter Marine Moss Point – activated; 18-acre Halter/Moss
Point Marine – activated; 19-acre Halter Pascagoula – activated; multiple dock,
wharf and warehouse facilities. 92-B Ingalls. Ingalls Shipbuilding Operations in Pascagoula
(a subsidiary of Northrop Grumman Ship Systems); 109.5 acre East Bank Yard and
228.8 acre West Bank Yard - activated; temporary minor boundary modification
approved for Venezuelan project; multiple dock, wharf and warehouse facilities. 92-C Avondale. Avondale Boat Division in Gulfport (a
subsidiary of Northrop Grumman Ship Systems); 60.9 acres in Parcel #1 and 60.9
acres in Parcel #2- activated; multiple dock, wharf and warehouse facilities. 92-D Chevron. Chevron USA Product Company in Pascagoula;
3,104 acres – activated; refinery facilities. PART V. SUBZONE ACTIVITY. VT Halter Marine, Inc. – Subzone 92-A Subzone 92-A is operated by VT Halter Marine, Inc. The Subzone was approved by Board Order 373
on March 4, 1988 on behalf of Trinity Marine.
The Jackson County portion of the Subzone was activated March 25, 1988,
and the Gulfport portion was activated August 15, 1998. Three projects were conducted this year using
the benefits of the Zone. Additionally,
over 900 people were employed as a result of these projects. In 2002, Halter Marine was acquired by
Vision Kinetics from Friede Goldman Halter and became VT Halter Marine, Inc. Subzone Description and Facilities. Subzone 92-A
contains approximately 88 acres at four neighboring, but not adjoining,
shipyards. The primary manufacturing
activities consist of offshore supply and work-boats, fishing boats, ferries,
dredges, tugboats, push-boats, survey and research ships, for both commercial
and government customers. Description
of Activity. Halter Marine is the nation’s leading
commercial shipbuilder and one of the top builders in the world of mid-sized
ocean-going vessels. Halter’s vessel
designs can be found in virtually all facets of the maritime industry, and its
U.S. shipyards have built more than 2,600 vessels - more than any other
shipbuilder in the world. The company
uses modular construction methods because it is not practical to attempt to
build a small ship as one large piece.
The vessel is constructed using smaller modules (assemblies and
sub-assemblies). Each vessel passes
through various process lanes as it evolves from raw material to a finished
product. During this
Zone period, numerous projects have been constructed in Subzone 92A with three
of them directly using the benefits of the Foreign Trade Zone. These three consist of a semi-submersible
drilling rig, one Rocket Booster Ro-Ro Transport, and a 579-foot Car Carrier.
MOVEMENT OF MERCHANDISE FOR
SUBZONE NO. 92-A Merchandise in Subzone at Beginning and End of Fiscal Year Beginning Ending Value Value
Domestic Origin/Duty Paid $44,528,481 $ 7,349,967 Foreign Status $42,665,280 $ 9,350,033 Total: $87,193,761 $16,700,000 Movement of Merchandise Received Value Domestic Origin/Duty Paid $ 9,647,385 Foreign Status $ 127,900 From Other U.S. FTZ's Domestic status $ 0 Foreign
status $ 0 Total: $ 9,775,285 Forwarded Value
To The U.S. Market $ 80,269,046 To Foreign Countries (Exports) $ 0 To Other U.S. FTZ's $ 0 Total: $ 80,269,046 Explanation of Discrepancies: None Value Added: Estimated amount of value-added activity within the subzone was approximately $10 million. Main Categories of Foreign Status Merchandise Received
Category Value Joiner Material $ 89,125 Machinery $ 38,775
Total: $127,900 Foreign Status Merchandise Received: Nonprivileged Foreign $127,900 Privileged Foreign $0 Customs duties collected on merchandise entered into U.S. Custom’s territory from the subzone during the fiscal year amounted to $243,055. Northrop Grumman
Corporation, Ingalls Operations –
Subzone 92-B
GeneralSubzone 92-B is operated by Northrop Grumman Ship
Systems, Ingalls Operations. The subzone
was approved for activation on May 15, 1991, with the first shipment arriving
on July 10, 1991. Subzone Description and
Facilities The Ingalls subzone site is located on both sides of
the East Pascagoula River at its junction with the Mississippi Sound, 12.1
nautical miles via a 38-foot deep channel with no overhead encumbrances from
the Horn Island Pass sea buoy in the Gulf of Mexico. The East Bank yard consists of 157 developed
acres and the West Bank yard has 426 developed acres. The West Bank also has 211 acres of
undeveloped land that is available for future expansion. Only 353.5 acres, which include the shipyard
wharves, docks, dry dock, berthing spaces, and piers, are either fenced or
enclosed by structures and comprise the activated subzone. The 353.5 acres consist of 109.5 acres at the
East Bank yard and 244 acres at the West Bank yard. The balance of the acreage is available for
administrative offices, parking, and future expansion. During this past subzone year, several warehouses
near the current sub-zone were operational for storage of foreign material. The
additional sites were needed through March 2006 for Ingalls’ sub-contractors to
assemble cabin, galley, and other outfitting components for the Project America
cruise vessels under construction, and also to provide covered storage for
equipment and materials. These sites
consist of: Site 1B - Land and buildings consisting of
approximately six acres located at 4301 Industrial Road, Pascagoula, MS. This site is owned by Hopeman Brothers Marine
Interiors LLC and will be utilized to store and complete assembly of the
outfitting equipment and components for the AMCV cruise vessels. Site 1C - Land and buildings consisting of
approximately 7.4 acres located at 4502 Chicot Road, Pascagoula, MS. This site is owned by Pan American Life
Insurance Company, Inc., and will be utilized by Jamestown Metal Marine Sales,
Inc., to store outfitting materials and equipment for the AMCV cruise vessels. Site 1D - Land and buildings consisting of approximately
7.5 acres located at 2810 Louise Street, Pascagoula, MS. This site is owned jointly by Hopeman
Brothers and Jamestown Metals and will be utilized to store and complete
assembly of the cabins for the AMCV cruise vessels. Site 1E - Warehouse space at 2614 Telephone Road,
Pascagoula, MS, consisting of two warehouses, approximately 42,960 square feet
in Building F and 24,000 square feet in Building E. This site is owned by Dantzler Management,
LLC and will be utilized primarily to store materials and equipment for the
AMCV cruise vessels. Description of Activity Ingalls is one of the nation’s largest shipbuilders
and produces/overhauls large naval and commercial ships, with the majority
being built for the United States. The
ships built over the past 31 years have been destroyers, cruisers, and
amphibious assault ships used by the Marine Corps and corvette ships for a
foreign navy. Ingalls has also produced
large offshore drilling rigs; offshore supply vessels, hopper barges and
hopper-type rail cars used to transport grain and pellet-type products. In the construction of all its shipbuilding
products, Ingalls uses the modular approach common to all yards that use
advance production technology.
Production begins in fabrication shops where parts are fabricated to use
in steel assemblies, piping systems, electrical systems, and ventilation
systems. These products are built into
sub-assemblies, assemblies and finally into large modules. The modules, usually 3 to 5 in number, are
then joined together to form a total ship.
The ship is launched and brought to a pier where final outfitting and
testing is conducted. After final
testing, which includes trials at sea, the ship is delivered to the customer. During FY2002, the Navy awarded Ingalls a $1.97 billion
contract for the construction of four additional Arleigh Burke (DDG51) class
guided missile destroyers. Of the 28
DDG-51 destroyers ordered, 17 have been delivered. The company holds an option for one
additional ship and it’s expected to be awarded next year. A worthy note to remember, following a
terrorist attack in Aden, Yemen, in October 2000, the USS Cole (DDG-67)
underwent an extensive 14-month restoration project. The USS Cole was redelivered ahead of
schedule, sailed from Ingalls on April 19, 2002 and returned to her homeport in
Norfolk, VA, April 24, 2002 ready for duty. Ingalls is the sole designer and builder of the
Navy’s highly sophisticated WASP (LHD-1) class of amphibious assault ships,
eclipsed only in size among combatants by aircraft carriers. Ingalls was awarded contracts to build seven
of these ships and has delivered all seven.
The Navy ordered an eighth ship of the WASP class in April 2002 with a
contract value of $1.369 billion. In May 2002, Northrop Grumman Ship Systems was the
U.S. Navy’s selection to complete the system design for the DD(X) program. The DD(X) is the centerpiece of the Navy’s 21st
century transformation and is the cornerstone program for a family of surface
combatants to be designed and built over the next 25 years. Northrop Grumman’s Ship Systems sector will
lead the DD(X) system design, engineering prototype development and testing
under a $265 million contract. The
initial design contract has a total value of approximately $2.9 billion over
four years. Northrop Grumman Ship Systems was awarded a contract
in June 2002 valued at $11 billion to modernize the Coast Guard’s Deepwater
assets over a 20-year period. This
program will involve the acquisition of up to 91 ships, 35 fixed-wing aircraft,
34 helicopters, 76 unmanned surveillance and upgrade of 49 existing cutters and
93 helicopters. In an important international program, Ingalls is
near the completion of upgrading two frigates for the Venezuelan Navy under a
$315 million contract. The first ship was
delivered in May 2002. Ingalls continues to aggressively market its
capabilities in the international arena and is aggressively seeking new
construction programs for foreign navies. Ingalls and American Classic Voyages
Company signed a contract for the construction of the first major cruise ships
to be built in the United States in more than 40 years. The contract, with a potential value of $1.4
billion, is for two ships with an option for a third. Unfortunately due to a downturn in the travel
market, the owners filed for protection under Chapter 11. Work was suspended on the construction and
Ingalls is now in process of liquidating all on-hand materials to the Norwegian
Cruise Line Corporation. The partially
completed ship was towed to Germany in November 2002 for completion of
construction. Economic and Business Benefits to Ingalls Ingalls benefits from a subzone status at its
Pascagoula facility in several ways. The
primary advantage is the elimination of duty or relief from inverted duty rate
relationships. The average duty rate on
various imported commodities used in ship construction approximates 5% of the
value of the imported goods. By
utilizing subzone status, Ingalls performs final assembly of these parts and
components without paying duty. Because
the finished article is an ocean going vessel, no duty is required when entered
into U.S. Customs territory. The subzone also has benefits over using a drawback
duty, which has a time limit and ties up working capital until the article is a
finished product and is exported. In
shipbuilding the finished product takes 3 or 4 years to construct. Consequently, Ingalls would tie up working
capital and would not qualify for drawback duty because of time
limitations. Because shipbuilding
contracts usually involve progress payments for work or milestones completed,
tying up capital during the long construction period places Ingalls at a
disadvantage while striving to maintain a competitive position within the
industry. Operating as a subzone improves Ingalls’ ability to
compete in foreign markets. There is a
market for ships of the corvette size and combatant capability, particularly in
the third world or developing countries.
There are current opportunities in Taiwan, Israel, and Chile. Other countries have been considered, but
Ingalls was not competitive due to the advantages other countries provide their
shipbuilding industries. Subzone status
provides another method of reducing costs and places Ingalls in a more
competitive position internationally and domestically. The foreign content percentage of components will
vary from ships to ship, depending upon cost, quality, contract terms and other
factors. Generally, the foreign content
portion of a ship may range from eight to ten percent and the duty value of the
imported materials may average five percent.
Annual estimated cost for operation of the subzone, including zone fees,
Customs costs, and record keeping is $75,000. Subzone status is an important element in Ingalls’
strategy to improve its competitive position and enables it to produce ships at
a lesser cost. Other steps have been
taken to enable the company to compete in the shipbuilding and repair
industry. The company continues to
explore all avenues to become a more competitive builder of ships in the world
market. Public Benefits Historically, Jackson County and Pascagoula have a
strong history of manufacturing, dominated primarily by the presence of Ingalls
Shipbuilding. However, because of a
major scaling back in the shipbuilding industry, Ingalls has experienced a
severe reduction of its employment since 1978, when employment reached a high
of 25,038. By 1984, employment decreased
to 9,607. Employment in 1995 was 13,000
dropping to 10,097 in 1997. Current
employment level is 10,659. The annual
payroll is approximately $425 million. The effect of subzone status is more ship sales than
would otherwise have been possible because of an improvement in the overall
competitive position of the Jackson Country shipyard. The company’s employment and total output
will be lower without subzone status.
Local suppliers and service industries positively benefit by the
company’s subzone status. Domestic production
of the Israeli corvettes and other oceangoing ships benefits the U.S. balance
of trade because the ships will be built for foreign ownership. The aggregate economic effect on Pascagoula and
surrounding areas in Jackson County and the State of Mississippi includes
higher local tax revenues, lower unemployment and social service costs, and
increased spending by larger work forces at area retail and service facilities
than would be possible without subzone status. Merchandise in the Zone at Beginning and End of Fiscal Year Beginning Ending
10/01/2001 09/30/2002 Domestic Origin Duty Paid $ 37,422,781 $
41,186,172
Foreign Status $713,460,307 $388,332,741 TOTAL $750,833,088 $429,578,913 Movement of Merchandise
Received Value Domestic Origin/Duty Paid $ 3,763,391 Foreign Status $ 15,393,048 From Other US FTZs Domestic Status $ -0- Foreign Status (TJT Subcontractor) $ 396,680 TOTAL $ 19,553,119 Forwarded Value To the US Market $ 7,357 To Foreign Countries (Exports) $ 341,019,937 To Other US FTZ’s $ -0-____ TOTAL $ 341,027,294 Value added: Value added within the subzone totaled approximately $40,000,000. Main Categories
of Foreign Status Items Received (Top Five $) for FY ’02
Category
(Item) Value Diesel
Engines $ 7,084,796 Incinerator
Parts $ 825,800 Electronics $ 637,271 Miscellaneous
Drill Rig Material $ 535,801 Kitchen Ware
$ 528,603 Total $ 9,612,271 Foreign Status Merchandise Received Non-Privileged
Foreign $15,393,039 Privileged
Foreign $ -0- Customs Duties Collected $ -0- Material Destroyed in Subzone $ -0- Northrop Grumman Corporation,
Avondale Operations – Subzone 92-C
Northrop Grumman Ship Systems’
Avondale Industries is the operator of Subzone 92-C. Subzone 92-C consists of a 122-acre
shipyard located at 13301 Industrial Seaway Road (in the Bernard Bayou
Industrial Park), Gulfport, Mississippi.
The facility was activated effective May 1, 1998, however, to date, no
foreign status merchandise has been admitted to the Subzone. Operations within the Subzone include all
activities related to shipbuilding, including the receipt and transfer of
merchandise, fabrication, manufacturing, testing, manipulation, and
destruction. Direct employment at Avondale
Enterprises’ Subzone facility for the year is 299 persons. In mid-1997, a commercial contract was
awarded to Avondale to construct two (2) double-hulled crude oil carrying
vessels for Arco Marine, Inc. (ARCO).
Three more vessels have been added to the overall contract. This contract developed as a direct result of
the Oil Pollution Act of 1990. Avondale
activated this Subzone with the intention of possibly using it to store
material to construct modules for these tankers in conjunction with Avondale’s
operation of Subzone 2-C in New Orleans.
At this point in time, it has not been necessary to use the facility as
expected. However, there is still a
possibility that the company may use this facility as was initially
intended. Nevertheless, significant
purchases continue to be made for this contract from foreign vendors for long
lead-time material. The first two
vessels for the contract have been delivered.
The three remaining vessels are expected to be completed and delivered
in 2003 and 2004. Chevron Products Company U.S.A., Inc. – Subzone 92-D
The Pascagoula Refinery, Foreign Trade Subzone 92-D,
is owned and operated by Chevron Products Company, a division of Chevron U.S.A.
Inc. Approval of the refinery as a
Foreign Trade Subzone was granted by Board Order No. 747 on June 13, 1995. Activation of the Subzone was on September 7,
1995. Subzone site and activities Chevron’s Pascagoula Refinery is located in the
Bayou Cassotte Industrial Area, 35 miles east of the general-purpose zone at
Gulfport, Mississippi. The Subzone is
bordered on the south by the Mississippi Sound, on the east by wetlands and
pine forest, on the north by the Industrial area, and on the west by the city
of Pascagoula. The industrial area is
accessible via U.S. Highway 90 and Highway 611.
The site is located within the limits of Jackson County in the
southeastern corner of the State of Mississippi. The subzone covers approximately 3,100
acres. Subzone facilities consist of an
existing petroleum refinery served by marine facilities, marine and land
pipelines, and tank truck and rail car facilities. Petroleum stocks for the refinery may be crude oil,
intermediate feed stock and blending stock from both domestic and foreign
sources. The refinery operations convert
these stocks into petroleum products for both the Southeastern United States
and export markets. During the past
year, the Chevron subzone received crude oil from several areas throughout the
world. Received were various crude oils
from the Middle East, United Kingdom, Africa, North America, Central and South
America. In all, eleven different types
of crude oil were included in the refinery crude slate. The refinery also receives various
petrochemical feed stocks for processing in various chemical facilities located
within the subzone. Refinery
feedstock Source of refinery feedstock on a volume basis: Foreign crude oil as % of total crude – 98.2% Domestic crude oil as % of total crude - 1.8% Total crude oil as % of total inputs - 95.7% Domestic inputs as % of total inputs - 6.0% Product
Slate The Chevron Pascagoula Refinery product slate
consists of a variety of finished products including several grades of motor
gasoline for the Southeast Area Market, aviation gasoline for small aircraft,
jet fuel for commercial airlines, diesel fuels for transportation and
industrial machinery, liquefied petroleum gas (LPG) for homes and industry,
fuel oils for industrial use and vessel bunker, asphalt for roads and highways,
and various petrochemicals used in the production of synthetics and
plastics. During the past year,
approximately 86.6 percent of the products refined at the Chevron Subzone were
marketed domestically, with the balance of the refined products sent to export
markets. The following is a list of products refined at the
subzone and their percentage of total shipments on a volume basis: Gasoline - 35.9% Jet Fuel - 17.6% Distillate Oils - 25.2% Residual Fuel Oils - 2.4% Petrochemical - 6.1% LPG - 5.0% Other (primarily coke) - 7.8% Exports Chevron has regularly exported refined products from
the Pascagoula Subzone to destinations throughout the world: Exports as a % of total shipments - 13.4% Petrochemical exports as a % of total shipments –
.3%. 5.5% percent of the total petrochemical shipments
were exported. Plant
facilities Crude oil is received at the Pascagoula Refinery
Wharf and through a pipeline from Empire, Louisiana, and pumped to storage at
Pascagoula. While some of the crude
distillation output requires only blending to make finished products, most of
the output requires additional processing.
The lighter hydrocarbon streams are sent to the catalytic reformer units
and gasoil hydrotreating units for conversion into finished gasoline, jet and
diesel. The heavier oil streams from the crude units are sent to the
hydrocrackers, residuum desulfurizer, gasoil hydrotreater and delayed coker. These units produce gasoline, jet and diesel
blending components as well as feed for other units in the refinery such as the
Aromaxâ and aromatics units. The refinery consists of the following processing,
auxiliary and storage units: (a) Atmospheric
crude distillation units are used to separate the raw petroleum into streams of
different boiling ranges. Some of the
distilled petroleum is finished product, or requires only mixing with other
stocks to be ready for shipment. (b) Vacuum
distillation units receive the heaviest stream from the atmospheric
distillation unit and reboil it for separation under vacuum conditions. The distilled streams are primarily used for
feed to the hydrocracking units, the residuum desulfurization unit, and the
delayed coking unit. The heaviest
stream, or residuum, may also be used to produce asphalt or heavy fuel oil when
combined with other stocks. (c) Gas
Oil Hydrocracking units feed streams recovered from vacuum distillation and
convert them into lighter petroleum fractions by catalytic reaction with
hydrogen under high pressure. The feed
is mixed with hydrogen and "hydrocracked" at high pressure, producing
petroleum gases and lighter hydrocarbons for gasoline blending, jet fuel
blending, and further processing. (d) Fluid
catalytic cracking unit feeds streams recovered from vacuum distillation and
the residuum desulfurizer unit and converts them into lighter petroleum
fractions by catalytic reaction. The
feed is mixed with the catalyst and "cracked", producing petroleum
gases and lighter hydrocarbons for gasoline blending. Some "cracked" oil recovered from
the process is about as heavy as the original feed and is either further
treated for distillate fuel blending or is blended into fuel oil. (e) Sulfuric
acid alkylation units take a combination of petroleum gas streams and build
heavier molecules by joining lighter molecules together in the presence of
sulfuric acid. The resulting stream is a
valuable gasoline blending component. (f) Catalytic
reforming units feed light hydrocarbon streams from the atmospheric crude
distillation units and the gas oil hydrocracking units and convert them into
valuable gasoline blending components and xylenes that are recovered for
chemical sales. The feeds are passed
over a catalyst and structurally rearranged ("reformed"). The units produce hydrogen, as a byproduct,
that is consumed in many other units in the refinery. (g) Residuum
desulfurizing unit takes a combination of feed streams from the vacuum
distillation units and converts them into feeds for the fluid catalytic
cracking unit and the delayed coker unit.
The feeds react with hydrogen over a catalyst at high pressure,
producing small volumes of lighter hydrocarbons and improving the quality of
the product streams by removing sulfur, nitrogen, and metals. (h) Delayed
coking unit takes some of the residuum product from the vacuum distillation
units and the heaviest product from the residuum desulfurizing unit and
converts them into lighter hydrocarbons and petroleum coke. By heating under the proper conditions, the
feed is thermally "cracked" into lighter hydrocarbon streams, that
generally require additional processing to become finished products, and solid
petroleum coke, which is a finished product. (i) Gas
oil hydrotreating units feed streams from the delayed coking unit, and the
atmospheric and vacuum distillation units and converts them into jet fuel and
distillate blending components and feed for the fluid catalytic cracking
unit. The feed streams are reacted with
hydrogen over a catalyst at moderate pressure.
This operation improved the qualities of the products (as either product
blending components or as feed to other units) by removing impurities such as
sulfur and nitrogen. (j) Hydrogen
manufacturing units support the units in the refinery that consume hydrogen. (k) Eluxyl
Feed Preparation unit takes whole reformate feed from the rheniformers and
distills it into light reformate, heavy reformate and whole xylene. The light reformate and heavy reformate are
routed to blending where it is used as feed and mogas blending stock
respectively. The whole xylene is routed
to the Eluxyl unit or can be routed back as feed to the light reformate
splitters in the Eluxyl Feed Preparation unit. (l) Eluxyl
unit through the processes of adsorption and distillation splits xylene rich
feed into two streams, extract and raffinate.
The extract consists of toluene, paraxylene and other trace impurities,
and is eventually routed to the Crystallization unit for further
purification. The raffinate is
ultimately routed to the Isomerization unit. (m) Isomerization
unit feeds raffinate from the Eluxyl unit.
The raffinate contains approximately 2% PX, with the balance being MX,
OX and some ethylbenzene. The purpose of
the unit is to convert MX and OX to PX, and to convert ethylbenzene and some
non-aromatics to other products removable by distillation. The stream is then fed to a distillation
column where it is separated into light blending aromatics (LBA) and Rerun
column feed. (n) Crystallization
unit separates paraxylene from other xylene components through the processes of
crystallization and centrifugation. (o) Aromax®
unit recovers benzene from naphtha from the crude units and converts it into a
finished benzene product. This process
is registered to Chevron Corporation and presently the Pascagoula Refinery is
one of two U.S.-based refineries with this process. Asphalt manufacturing unit processes the residuum
from vacuum distillation to make paving asphalt. In addition, the refinery has storage capacity of
approximately 4 million barrels for crude petroleum and 12 million barrels for
product and intermediate streams. Public Benefit and
employment The subzone has aided the State of Mississippi in
its goal to maintain and encourage manufacturing activity. Due to the small
industrial base in our immediate geographic area, Chevron plays an integral
role in the economic stability of the community. Since it began operations in Jackson County,
Chevron has invested more than $2 billion at the Pascagoula facility. During the recent zone year, direct local
economic impact amounted to over $170 million, which includes the refinery’s
payroll as well as monies spent on local goods and services. The Chevron subzone
contributes to local taxes both though direct payments made by the refinery and
through sales, property and other taxes paid by Chevron employees. During the previous year, Chevron paid
approximately $14.7 million in county and school property taxes alone. The Chevron subzone provides highly desired
manufacturing jobs with high wages and offers a diversity of employment
opportunities. The Chevron subzone is
the second largest private, non-utility employer in Jackson County with
approximately 58% of its company workforce residing within Jackson County. The subzone also impacts the state of Alabama
economically, as approximately 31% of its company employees live within the
southern Alabama region. During the past year, Chevron employed approximately
1,200 full-time employees at its subzone.
In addition to direct employment within the subzone, Chevron’s presence
supports the employment base of the local trades and service industries
utilized in the refinery operations. The
subzone required an average of approximately 700 contractors (technical
professional, clerical, skilled tradesmen and laborers) to support the ongoing
maintenance and capital projects throughout the year. The Chevron subzone is currently undergoing a $170
million project to produce new EPA low-sulfur gasoline, as well as meet new
environmental specifications for on-road diesel. The project will allow the subzone to meet
the EPA’s clean fuel regulations by leveraging existing capacity through
reconfiguration of existing processes. It is expected that capacity will
increase by approximately 10 percent once the project is complete. As a result of the project, the subzone will
produce both a lower sulfur gasoline as well as a lower sulfur diesel fuel that
will result in lower automobile emissions nationwide. According to the EPA’s estimate, automobile
emissions in Jackson County alone will be 500 tons per year lower by the end of
2005 and more than 3000 tons per year lower by 2030. Construction began in early 2002 and is
scheduled to be completed by April 2003.
During this period approximately 800 contractors will be employed
specifically for project construction.
The direct and indirect impact of this project to Jackson County’s
economy will be more than $100 million for personal income, with over 3000
local jobs benefiting as well. Economic
and Business Benefits In order to meet the nation’s ever-growing energy
needs, the oil and natural gas industry must continuously invest huge amounts
of money in new exploration and production projects, as well as in facilities
that refine, distribute and market petroleum products. United States tax law plays a significant
role in determining whether needed energy investments can and will be made and
whether United States oil and gas producers will be able to effectively compete
in the ever growing and changing global energy market. The United States oil and natural gas
industry pays billions of dollars per year in federal, foreign, state and local
income taxes. In addition, its products
are subject to numerous excise taxes and other fees. Each reduction in cost can be the difference
that allows a United States refiner to compete globally. Foreign Trade Zone procedures have allowed
Chevron to lower its operating cost by: deferral of duty on foreign crude
remaining in the subzone inventory; avoiding duty on exports which negates the
need to file drawback claims for refund; and use of the NPF option allowing
equal tariff rates on certain products refined in the subzone relative to those
imported from foreign refiners.
Minimizing Customs duty liability helps the subzone to realize its
vision of delivering quality products at the lowest sustainable cost. This reduction in operating cost enhances
Chevron’s ability to maintain its Pascagoula Refinery and compete with other
suppliers of petroleum products in the Southeastern United States market and
worldwide. As a result of FTZ
procedures, annual zone savings were equivalent to .15% of imported value. In recent years, environmental expenditures in the
petroleum industry have increased dramatically.
The increase is due largely to the need to comply with increasingly
stringent federal and state environmental regulations affecting gasoline, air
and water emissions, and waste handling.
Chevron’s Pascagoula Subzone is a good role model for industry as well
as a responsible member of the community, and is committed to full compliance
with all environmental laws and regulations.
This commitment to environmental compliance resulted in environmental
related expense spending for air, water, and waste issues of approximately $3.4
million. These regulations boost the cost of refining and
require United States companies to integrate environmental responsibility into
all areas of operation. Environmental compliance has made it more difficult to
earn adequate profits on petroleum refining.
It imposes additional costs to enable the subzone to meet
environmentally mandated product specifications and regulations. In contrast, many foreign refiners with whom
we compete have little or no environmental regulations and avoid the resulting
operating costs. Thus, the benefits
derived from our current foreign trade zone status help to equalize the playing
field vis-à-vis foreign refiners. Since Subzone activation, Chevron has regularly
exported refined products from the Pascagoula Subzone to destinations
throughout the world. Adequate domestic
markets do not exist for several products that are produced at Pascagoula. Consequently, the export markets provide a
practical alternative. For example, the
refinery’s output of 0.5% sulfur diesel cannot be sold for on-road use in the
United States due to Clean Air Act regulations, making export sales an
important component of our diesel strategy.
Another important export is coke.
Domestic markets are limited making foreign exports by far the largest
outlet of our coke production. During the past year the Pascagoula Subzone
supplied zone jet fuel for use throughout the Southeastern and Eastern United
States for foreign flights. This in turn
displaces purchases of foreign source jet fuel.
Export activity has helped Chevron and contributes to improving the
United States balance of trade; however, the export markets are very
competitive given the worldwide source of supply. Being competitive with foreign refiners in
these markets is crucial to the longevity of the facility. The Foreign Trade Zone program helps domestic
oil and gas companies to maintain its competitiveness in today’s global
economy. Merchandise in the Subzone
at Beginning and End of Fiscal Year Beginning Ending 10/01/2000 09/30/2001 Value(Millions) Value (Millions) Domestic Origin $ 101.9 $ 35.2 Foreign Status $ 137.3 $140.9 Total $ 239.2 $176.1 Movement of Merchandise Received Value (Millions) Domestic Origin/Duty Paid $ 314.7 Foreign Status $
2,407.5 From U.S. FTZs $ 0 Total $
2,722.2 Forwarded To U.S. Customs Territory $ 2,513.2 To Foreign Countries $ 208.4 To Other U.S. FTZs $ 63.7 To Bonded Warehouse/Storage $ 0 Total $
2,785.3 Value Added $ 175
million. Categories of Foreign
Merchandise Received Category Value
(Millions) >24.9
API Gravity $ 1,328.7 <25.0 API Gravity $ 1,078.8 Total $ 2,407.5 Foreign Status Merchandise
Received: Value
(Millions) Nonprivileged
Foreign $ 994.3 Privileged
Foreign $ 1,413.2 Total $ 2,407.5 Customs duties collected on
merchandise: $3.3
Million. Merchandise destroyed: $87.8
Million. PART VI. PHOTOGRAPHS.
Photographs of Northrop Grumman (Ingalls subcontractors and suppliers), Friede Goldman and Duratex are enclosed showing typical activity. The Foreign Trade Zone No. 92 brochure is also enclosed. January 22, 2003 ____________________________________ Bruce Frallic, Secretary/Treasurer Mississippi Coast Foreign Trade Zone, Inc. Enclosures: Photographs and Brochure |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| © 2003 Mississippi Coast Foreign Trade Zone |  |
Among
its many tenants, MSAAP is home to a Boeing company that brings all the
components of its RS-68 rocket to their MSAAP plant, where these parts are
fully assembled and test fired at the nearby NASA rocket engine testing
facility.