Royal Caribbean Cruises and the Port of Galveston will sign a long-term agreement on Thursday to build a third cruise terminal in Galveston, following approval Wednesday by the port’s governing board.

The contract, more than a year in the making, clears the way for Royal Caribbean to invest about $100 million into a 150,000-square-foot terminal, which is slated to open in November 2021. This terminal will be able to accommodate the cruise company’s largest ships, the Oasis class of vessels,which can hold roughly 6,600 guests, as well as Royal Caribbean’s future fleet of ships, the Icon class that will be powered by liquefied natural gas (LNG) and use fuel cell technology.

“I’m relieved that we’re finally there,” said Port of Galveston Director and CEO Rodger Rees, “although the work just begins. You spend a year negotiating a contract, getting all the i’s dotted and the t’s crossed, but now the work begins. So there’s that relief of getting the paperwork done but now there’s the construction period.”

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Construction of the terminal is scheduled to start in April, though engineering work, getting utilities to the site and examining the pier has already begun.

Royal Caribbean and the Port of Galveston signed a memorandum of understanding in December 2018. Since then, Galveston’s cruise business has continued to grow. This year marked the first time more than 1 million people have embarked on cruises from Galveston.

Cruises started sailing from Galveston in 2000. The port has two terminals, one used by Carnival Cruise Line, the other shared by Carnival, Disney Cruise Line and Royal Caribbean.

Terminal 3, on 10 acres of land at Pier 10, will be used by Royal Caribbean, which will lease the terminal land for 20 years. The cruise line will then have the option of extending that lease for an additional 10 years, up to four times.

The port will be responsible for items including maintenance, parking (it’s going to build a surface lot with more than 2,000 parking spaces), and improvements to the dock to accommodate the larger vessels. Royal Caribbean will help with the cost of improving the docks.

The Port of Galveston is also paying roughly $1 million to move Wallenius Wilhelmsen Logistics, which is currently located on Pier 10, to the west side of the port where there’s more cargo activity. Wallenius Wilhelmsen Logistics’ Galveston operation moves heavy equipment, such as bulldozers, buses, tractors and other things unloaded from roll-on/roll-off vessels.

The Port of Galveston will launch a study, to be completed by March, on how a third cruise terminal would affect road traffic. The terminal would have the potential to unload and reload 6,000 people in one day.

More than 70 percent of Galveston cruisers drive to the ship. Royal Caribbean says more people will fly to Galveston for its Oasis vessels, but port officials still want to be cognizant of the increased traffic.

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“We’re trying to relieve traffic off of Harborside Drive,” Rees said, “so we are studying alternative traffic plans.”

Galveston Mayor Jim Yarbrough identified traffic as the biggest issue the city will have to work through, but he also identified it as a positive. Ideally, the additional passengers would not only park in Galveston, but also shop in the city’s stores and dine in its restaurants. He said officials are brainstorming ways to handle the traffic, adding that the Texas Department of Transportation’s plans to widen I-45 South will help, too.

“Financially, it’s going to be a good deal for the city and a good deal for the port,” Yarbrough said. “It’s laying the foundation for a nice future.”

andrea.leinfelder@chron.com

Twitter.com/a_leinfelder