A $4.5 billion oil refinery and storage terminal is “aiming to hit the bottom running in the brand new Year with building set to create between 300-600 jobs “at a single time
Peter Kreiger, Oban Energies managing director, informed Tribune Business that the group hoped to finish Heads of Settlement negotiations with the government for the Grand Bahama-based venture “within weeks
Completion of that agreement will enable Oban’s Environmental Influence Assessment (EIA) to be submitted for approval, and kickstart the permitting and approvals course of, with Mr Kreiger optimistic this might begin in the brand new Year. He added that the group aimed to start pre-building in 2018, describing the project as “a win-win for each Oban and the Bahamas – particularly the place the latter’s economic system and employment were concerned.
“We’re actually pretty far alongside within the sense that we are currently negotiating a Heads of Agreement with the federal government, Mr Kreiger instructed Tribune Business. “It needs to be achieved in the quick term, hopefully over the approaching weeks.
“We’re additionally in all probability about three-4 weeks from wrapping up our EIA. We will probably be submitting that to the federal government, assuming the Heads of Settlement is done in that time, as properly. The purpose is by the tip of the yr, starting of the brand new Yr, to begin the permitting process.
“I assume that in a perfect world, which you and i each know never exists, we might hopefully be in position by Spring to have our permitting carried out and pre-construction possibly starting. If not, undoubtedly by the end of 2018. We’re going to be hitting the bottom running here, hopefully in the new Yr. /p>
Oban is proposing a $1.5 billion first phase funding in a 20 million barrel, “multi-purpose bulk storage facility for petroleum products, which can be positioned inside one to two miles of east Grand Bahama’s current Statoil terminal.
The development, which is expected to be completed in 2021, also involves a 250,000 barrel per day oil refinery. This represents the potential return of oil refining to Grand Bahama, and means Oban is envisioning a grander undertaking than the existing Buckeye Partners-owned BORCO facility.
Mr Kreiger yesterday mentioned the project would generate between 300-600 development jobs at “a single time depending on the construct-out phase, with some eighty-a hundred and twenty posts created when operations launch.
“The majority of these jobs will probably be higher paying jobs than the typical Bahamian wage, in response to the financial research we’ve supplied to then Authorities, he advised Tribune Business.
“We really feel it is going to be a helpful contributor to assist the economic restoration for the island. The research showed that for each dollar earned by somebody employed by us, the financial system will feel a 1.6x (instances) multiplier effect. Folks can be going out to dine more, going to the theatre extra and stimulating the financial system now they have extra disposable earnings. /p>
Mr Kreiger added that the oil storage terminal’s first phase would require a $300 million funding to construct-out to a 4 million barrel capability. The facility will require two more phases to complete, one featuring the addition of six million barrels, and the latter doubling capability by 10 million barrels to the target 20 million.
“That might be wanted to support the refinery, he said of the storage terminal. “That refinery will start with 25,000 to 50,000 barrels per day, and as market demand dictates we are going to grow from there. /p>
Bahamians have grown increasingly sceptical about so-referred to as ‘mega multi-billion greenback tasks, provided that many have been promised but few have been delivered for the reason that turn of the century.
Acknowledging the concerns, Mr Kreiger mentioned Oban Energies two funding banking companions – Stifel, Nicolaus & Firm and Drexel Hamilton – had visited the Bahamas twice to offer the government with verbal and written assurances that the necessary financing will likely be forthcoming.
“Our investment bankers have flown down and given assurances to the federal government in person twice – as soon as to the Deputy Prime Minister, and the other to the Bahamas Funding Authority (BIA) – that the funds will probably be accessible and accessible once permitted, he informed Tribune Business.
“Other than the actual fact we’re spending cash hiring native Bahamians, and have bankers coming down and giving all the necessary assurances – verbal and in writing – there’s not much more we will do.
“We’re not the type of firm to say: ‘Trust us, it’s coming We wish actions to speak louder than words. We’ve most likely spent $10 million in pre-building and engineering costs to indicate our dedication, and if we discover the talent we intend to rent as many native individuals as we will. Simply see; we’re placing our cash where our mouth is. /p>
Oban Energies has hired Bahamas-based Islands by Design as its environmental consultants, with Lambert Knowles also engaged to perform geotechnical work. The Mosko Group has also been employed for development and engineering work.
Mr Kreiger confirmed to Tribune Enterprise that Oban Energies had provided to produce fuel at “preferential prices to Bahamas Energy & Light (BPL) and other native utilities, in a bid to assist decrease this country’s power costs.
“We have provided to try this, and provides preferential pricing to the federal government so as to point out both our assist for the community in addition to the fact we feel this could be a win-win for everybody, he said.
“It’s something the federal government wish to discover, but proper now everyone’s centered on the allowing and getting the project off the ground. /p>
The Minnis government, by phrase and action, is intent on restructuring the Bahamas economic model and repositioning this nation to attract new industries, having seemingly realised that the ‘twin pillars of tourism and monetary companies are not adequate to satisfy its employment wants.
The Bahamas has effectively needed an financial ‘game changer for a decade, and particularly for the reason that 2008-2009 recession, and the Oban Energies venture – if it succeeds – might assist obtain that goal.
Mr Kreiger advised Tribune Enterprise that Oban Energies had been eyeing the Bahamas since 2008, having obtained an ‘approval in principle from the Ingraham administration that year, only to be derailed by the worldwide downturn.
He explained that the group had to wait until financial and energy market circumstances improved, and resumed work on the east Grand Bahama challenge some 18-24 months in the past.
Oban Energies chosen its undertaking site based mostly on the deep water access obtainable to large tankers, and the land entry to the ocean. Statoil’s presence meant the world was already a ‘brownfield site, lessening the environmental concerns, while the location can also be effectively-faraway from populated areas.
“The improvement totally built-out will probably be within the neighbourhood of a pair hundred acres to facilitate both the storage and refinery, Mr Kreiger stated. “To discover property with clear title is not the easiest thing to do in Grand Bahama, however we now have it underneath contract with deposits down depending on allowing from the government. /p>
He praised the co-operation and enthusiasm displayed by the Minnis administration to-date, and mentioned Oban Energies might later embody a liquefied natural fuel (LNG) part at its east Grand Bahama site.
“The initial approval in principle we had did include LNG, Mr Kreiger advised Tribune Business. “But due to the need for pipelines and other issues that weren’t very nicely acquired prior to now, we decided to focus on storage and the refinery.
“We are fascinated about looking at LNG once more sooner or later, however proper now – because of what we believe to be a extra favourable financial and political environment – we imagine storage and the refinery shall be one of the best place to begin. /p>
Oban Energies, like BORCO, is aiming to exploit Grand Bahama’s US proximity and location on main delivery routes to serve as an offshore distribution/break bulk hub to an power industry struggling for deep water ports on the Gulf Coast and south-east US.
Larger vessels from North Africa, Europe and Asia can have their hundreds broken down, and transferred to smaller vessels, who will then take the product from Grand Bahama into the US. And US oil and energy exports can use the identical route in reverse to get their products to market.
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