ANRA, as the conduit bond issuer for the Gregg County Refining, LLC, was notified by the Texas Bond Review Board that the project was unable to close on the Hurricane Ike Bonds, according to a news release.
The project was designated for funds under the Hurricane Ike Disaster Area Bond Program, the release states.
The proposed $181 million refinery is slated to be on a site off Texas Highway 323, 1.25 miles southeast of New London.
“The 150-day timeline for finalizing the documents required for the public bond offering was a very aggressive timeline from the outset. All of the parties involved worked tirelessly to finalize the myriad of documents ranging from loan agreements to detailed construction contracts as well as crude and off take agreements,” Ken Williams, Gregg County Refining owner and spokesman, said in a news release.
“While the expiration of the Hurricane Ike Bond designation is a disappointment, it by no means indicates that the project is dead.
The refinery is a good project in an exceptional location. The outpouring of support from local community leaders has been outstanding. We are committed to delivering the project and working with ANRA and local community leaders to bring this project to fruition.”
ANRA general manager Kelley Holcomb said the Hurricane Ike program funds was a good avenue in that it offered tax exempt investment opportunities, which could mean lower interest rates and greater profitability once the refinery becomes operational.
However, he said what people don't realize is that doing a tax exempt bond issue is detailed, and the government requirements are extensive.
Now, ANRA and project owners are looking at other financing options and what bond programs are available.
Holcomb said in a news release that ANRA Industrial Development Corp. offers several other funding avenues that don't have the same time constraints.
“The project owners are working with ANRA to finalize a funding package that meets the projects objectives,” he said in the release, adding that project owners are working to develop project documentation to satisfy additional funding streams.
“I want to thank Governor Rick Perry, his staff and the Texas Bond Review Board for their commitment and hard work on the refinery project. I believe they are still committed to the project and we intend to work closely with them to look for other financing options.”
In the meantime, Duane Gordy, business consultant for CDE Inc., a facilitative management service company involved in the project, said the refinery project is moving forward.
Gordy said there also will be various public meetings in the area before the permit process begins.
Plans for the project are to produce 30,000 barrels per day of light sweet crude and produce gasoline and diesel fuel.
“The basic concept of that project is to take crude oil that is relatively local and available and produce gasoline and diesel as a result,” Holcomb has said.
John Kennon, vice president of business development for CDE Inc., has said the reason behind the refinery project is “true economic development.”
An estimated 300 to 400 jobs will come to the area during the approximately two-year construction period, and up to 85 high-paying, full-time jobs are expected at the site when the refinery is operational. Over the next decade, the economic impact of the project is estimated at $8 billion, according to a presentation Kennon made earlier this year. The immediate economic impact, including construction and sales tax on local materials, is estimated at $384 million.