You've heard it before: there hasn't been a new refinery built in the US in
the last 175 years. Actually, it's closer to 32 years or so, but the
repeated references to it, as if some giant opportunity was squandered by
the industry, don't go away.
If nothing else, the developers of Arizona Clean Fuels Yuma are certainly
determined. They received another setback this week, pushing the development
of the plant back again. But if they're getting near the end of the road in
trying to build the first US refinery since the Garyville, La. refinery was
opened back in the 70's, it doesn't show.
ACFY said Monday it has been forced to delay the plant's start by a year
after a lawsuit over the original site in Yuma, Arizona, led developers to
move to another location. The plant is now expected to start in the second
quarter of 2012, rather than Q2 2011, according to Glenn McGinnis, CEO of
ACFY. McGinnis, an experienced oil industry veteran, has been leading this
effort for years.
He told Platts' Beth Evans that ACFY will need the state to approve new air
permits and a land lease because of the move. And ever the optimist, he said
the settling of the dispute over the site with the Quechan tribe had enabled
ACFY to go ahead with new attempts at raising financing, and that company is
now "in discussions with a couple of investment groups."
The project's total cost is $3.7 billion, McGinnis told Platts, including
$3.2 billion of costs in the US and another $500 million for a crude
pipeline through Mexico to the refinery.
Despite the long road for ACFY, most of the news still shows progress toward
the plant's development. It signed a letter of intent earlier this year to
buy Canadian synthetic crude, though McGinnis told Platts that a recent hike
in Alberta's royalty tax that has led to lower spending in the province and,
in turn, lower production forecasts, could
mean less crude for the project. . (It failed to strike a deal with Mexico's
Pemex on Mexican supply). Its state air permit was issued and reauthorized
(but the new site will require yet another new air permit).
The bottom line: ACFY is still around after much skepticism and doubts,
which still prevail. It may yet build the first new refinery in what will be
more than 35 years, based on its new 2012 target.
From a media perspective, this startup seems different. A lot of industrial
startups make grand announcements, come out with some press releases, maybe
even have a media event with all sorts of fancy videos and important people
in attendance, and then just sort of fade away. One day somebody picks their
head up and says, "Hey, whatever happened to that new such-and-such plant
they were going to build in South Podunk?"
ACFY has been showing enough public progress over several years that it's
safe to say that for now, it doesn t seem to be following that script.
Posted by John Kingston on February 5, 2008 03:06 PM | Permalink
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