The government of the Bahamas has approved a multibillion-dollar plan by Oban Energies LLC, Palm Beach Gardens, Fla., to build a grassroots refinery and liquid-bulk storage terminal along the Northwest Providence Channel, off the southern tip of Grand Bahama Island, 35 miles east of Freeport.
With negotiations between Prime Minister Hubert Minnis’s government and Oban Energies now completed, the parties will sign a heads of agreement on Feb. 19 for the two-phased project, which alongside a 20 million-bbl liquid-bulk storage terminal, will include a 250,000-b/d refinery, the Bahamian government said in a release.
The project’s first phase will involve construction of 4 million bbl of fuel storage as well as a 50,000-b/d refinery, both of which will be expandable to 20 million bbl and 250,000 b/d, respectively, by their fourth year of operation, according to the government and Oban Energies.
First-phase development also will include construction of a harbor and deep-sea loading docks equipped to service very large crude carriers.
Phase 1 of the project—alongside construction of initial refining operations—will focus on adding storage tankage for crude, residual fuel oil, middle and light distillates, specialty vegetable oils, and other heavy oil, according to Oban Energies’ web site.
The project’s Phase 2 will focus on expanding capacity of the refinery that—once completed—will be able to process less-expensive, heavy sour crudes as well as have the flexibility to process other opportunity crudes as dictated by market economics.
With total estimated costs of $1.5 billion for the terminal and $4 billion for the refinery, overall project investment amounts to about $5.5 billion, according to Minnis.
Following the Feb. 19 signing of the main HOA, two additional HOAs related to the proposed project are scheduled to be signed within the following 2 weeks, the government said.
Oban Energies—which has agreed to make commercially reasonable efforts to use Bahamian materials, Bahamian professional services and other Bahamian services in connection with project implementation—has yet to reveal a definitive timeframe for when it expects to commission Phase 1 of the development.
Project contract
Oban Energies previously let a contract to TECS Netherlands BV to provide all front-end engineering and design work for the terminal portion of the project.
TECS’ scope of work under the FEED contract covers the entire terminal engineering scope, including the VLCC jetty, piping to the inland-support vessel harbor, storage tanks, terminal layout, and all auxiliary installations such as water, wastewater, vapor-treatment, and power-generation facilities, the service provider said in a December 2017 release.
A value of the contract was not disclosed.
Contact Robert Brelsford at [email protected].
