Valero to fund $100 million recycled water infrastructure in Corpus Christi reuse deal

Valero to fund $100 million recycled water infrastructure in Corpus Christi reuse dealThe 30-year agreement sees the refiner financing a 10-mile pipeline and storage tank to access up to 8 million gallons per day of effluent, helping the city preserve dwindling potable supplies.

Valero Refining will design, construct, and fund $70-$100 million in infrastructure, transferring ownership to the City upon completion.

The 30-year agreement provides Valero with 3 MGD of recycled water initially, scaling to 8 MGD to offset industrial potable usage.

Valero will pay the city's raw water rate (currently $1.18/1,000 gallons) plus reimbursements for operational costs like electricity and chemicals.

The project includes an oversized 24-inch transmission line to allow future industrial customers to access reuse water.

The deal is a critical component of the city's strategy to delay a projected Level 1 Water Emergency in November 2026.

The Corpus Christi City Council has approved a 30-year agreement with Valero Refining - Texas, L.P. for the sale of recycled water, a deal structured to offload significant capital costs from the municipality to the industrial user while securing a new non-potable water supply. Under the terms of the agreement, Valero will finance, design, and construct the necessary conveyance infrastructure—estimated to cost between $70 million and $100 million—to transport effluent from the Greenwood Wastewater Treatment Plant to its refinery. Nick Winkelman, Interim Chief Operating Officer for Corpus Christi Water, described the deal as a "win-win" that allows the city to offset potable water demand during a critical drought period. The project will initially provide Valero with 3 million gallons per day (MGD) of reclaimed water, with provisions to increase that volume to 8 MGD in future phases. "The agreement provides for Valero to design, construct and fully fund all of the infrastructure needed to convey this effluent water," Winkelman told the council. This infrastructure includes a 24-inch diameter conveyance line spanning over 10 miles and a 10-million-gallon storage tank at the Greenwood facility. Upon completion and acceptance of the work, ownership of the assets will be conveyed to the City of Corpus Christi. City Manager Peter Zanoni highlighted the financial benefits of the arrangement, noting that the city gains a "$100 million asset" without burdening ratepayers or diverting staff resources. "Valero is taking this on 100%," Zanoni said. "They're going to design it, they're going to construct it... and then they're going to give it to the city." The 24-inch pipeline is being oversized at the city's request to facilitate future sales of effluent to other large-volume industrial customers in the area. Valero will purchase the water at the city's established raw water rate, currently set at $1.18 per 1,000 gallons, a rate subject to annual increases. Additionally, the refiner will reimburse the utility for specific operational costs, including electricity for pumping and chemicals. The project is driven by urgent hydrological constraints. During a water supply update later in the meeting, staff noted that Lake Texana, a key regional reservoir, is projected to drop below 50 percent capacity by early April 2026, which would trigger curtailments. The city projects a Level 1 Water Emergency could be triggered by November 2026 if new supplies do not come online. The Valero project is targeted for completion by that November deadline. To reach the full 8 MGD capacity, the system relies on a separate project currently being designed by Ardurra, a firm active in Texas water infrastructure. This involves a conveyance line from the Oso Water Reclamation Plant to the Greenwood facility. The agreement includes provisions requiring the city to complete the Oso-to-Greenwood connection within five years to ensure the full volume is available, though officials stated they aim to complete it within two years. "It offsets our water supply demand," Winkelman said. "One way to do that is by furnishing our existing customers with effluent water."