Kinder Morgan, port board work toward deal|[06/22/08]

Published 12:00 am Friday, June 20, 2008

With a legal hurdle crossed, Kinder Morgan and the Port of Vicksburg are inching closer to the Houston company winning a new contract to operate the harbor port.

In March, Warren County supervisors, who have final authority, gave a tentative OK to a seven-year extension with Kinder Morgan. Key provisions included a base rent of $235,000 with an additional 8 percent if the gross revenue of the contract operator of the terminal at the Port of Vicksburg tops $2.255 million. Currently, performance-based payments to the commission total 8 percent if gross tops $1 million and 15 percent if it tops $1.4 million. In May, the company countered with a five-year deal with five, two-year options and an additional six acres of land to be leased by the port.

Commission attorney J. Mack Varner said Monday he was satisfied with that version of the new contract.

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“The concern is when the first payments would come to us,” Varner told commissioners on the same day they heard activity has ramped up at Ceres Research and Industrial Interplex, which the board also operates.

Discussions have continued for more than six months and taken place on three fronts. The third one involves Kinder Morgan’s efforts to establish the port as a major transfer point for the SeverCorr steel plant near Columbus.

In January, its Russia-based parent, Severstal, purchased a majority stake in the northeast Mississippi plant. Also, Kinder Morgan has looked to partner on the venture with Consolidated Terminals and Logistics Co. to help move raw steelmaking materials on rail lines to the main plant, adding another layer of approvals needed for a final sign-off by local government.

As talks continued here, Kinder Morgan announced a $12.8 million expansion to its port facility along the Tennessee-Tombigbee Waterway in Monroe County, with company officials planning to ship materials from there to the SeverCorr plant.

Tom Murphree, regional sales manager for the company’s Lower River Region, said Warren County’s remaining issues include installing scales at the rail spur serving the T-dock to gauge daily tonnage.

“The economics are agreed to,” Murphree said, adding contract terms between the steel and transportation entities are expected by the beginning of August when the current port lease expires.

This week, executives of Force 10 USA Homes Inc. said they expect to close a deal in September to manufacture energy-efficient, storm-resistant homes at the spec building at Ceres. It would give the site its first tenant since being built in 1995.

Tonnage at the port dipped a bit in May. Reports from the company showed 6,680 tons of mainly pipe and steel were unloaded, down from 10,546.7 tons in April. Revenue followed, as $63,538.37 was collected, down from $93,012.45.