Proposed Guyana refinery...From Guyana Chronicle, Sat Oct 6/07:
US$500M CRAB ISLAND PROJECT:
Investors looking to ‘fast-track’ project to double production from
55,000 to 110,000 barrels per day
By Mark Ramotar
THE overseas-based investors behind the proposed major US$500M oil refinery at Crab Island in the Berbice River are currently exploring the possibility of fast-tracking the project from 55,000 to 110,000 barrels per day (BPD).
After enduring a relatively long-wait, the U.S.-based developers, led by Guyanese Mr. Romeo Cipriani, last month finally received an interim environmental permit from the Environmental Protection Agency (EPA) to move ahead with the proposed project.
Company Secretary/Director of Crab Island Refinery Incorporated (CIRI), Mr. Seo Persaud confirmed to this newspaper that ‘an environmental permit was finally granted’, and said they are currently “analyzing the various financial structure which best suits the Guyana economic environment”.
He said, too, via an email from New York, that “such exercise usually takes two to three months to be concluded.”
According to Persaud, the investors are in the process of evaluating a few financial structures which have been proposed to Delta Energy (DEPCO)/Crab Island Refinery.
One such structure on the front-burner, he said, is to fast tract the proposed project “from a 55,000 Barrels Per Day System to a 110,000 BPD System”.
According to him, this structure “will double the down stream products” and “will increase the number of employees to be hired at the Refinery Site by several hundreds more”.
“Additionally, the dynamics of the industry will create far reaching economic empowerment to the Government and People of Guyana,” Persaud said.
In April last year, the government signed the MOU with CIRI to set up an oil refinery at Crab Island.
The refinery is projected to be built in stages with an initial capacity of about 20,000 barrels a day of crude, rising to 100,000 barrels a day in five years.
When the MOU was signed, the developers envisaged that construction could start within nine months with eventual employment of 1,000 persons, and first production could start within a further 15 months.
“There is a need for such a refinery in Guyana. Energy is a lifeline of any country and this could be better if you have cheap energy, reasonably priced energy,” Cipriani told the Guyana Chronicle during an interview.
Cipriani, who is a Berbician, is the sponsor and developer of the project and said his financial partners are Israelis based in the U.S. and Americans as well. An engineer, he comes from long years of involvement in oil refineries and construction.
“Guyana has still not hit the jackpot in terms of finding oil. The misconception is sometimes that you can’t have a refinery if you don’t have crude. There are a lot of places in the world with refineries where crude doesn’t exist,” he said.
The refinery, he said, is slated to purchase crude petroleum on the world market and sell its products on the world market.
Cipriani said he has been pursuing this project since 2003, and the incurred development cost to date is more than US$2M, acquired primarily through the company’s equity investors.
Cipriani said he is ready for the ground-breaking ceremony which will initiate the commencement of civil works followed by the construction of the facilities.
He said state-of-the-art refinery technology will be employed to produce a variety of products which include premium gasoline, medium gasoline, diesel fuel, kerosene/jet fuel, fuel oil (Bunker C), LPG and asphalt.
Meanwhile, Executive Director of the EPA, Mr. Doorga Persaud, last month confirmed that an interim environmental permit was granted to the investors.
The investors, on several occasions in the past, have expressed both concern and optimism that the delays experienced in getting the requisite environmental permit from the EPA, which entailed a thorough assessment from the Environmental Assessment Board (EAB) to start the project, would be ironed out this year.
The EPA Director confirmed that an ‘interim’ permit was granted to Cipriani but said it is only valid for one year.
“A draft interim permit was issued to the developer sometime back (and) this draft permit is for one year, within which the developer is required to provide a set of outstanding information to the EPA and for the EAB to make a ruling on or give their recommendations,” Persaud said.
He said this one-year interim permit is specifically for the ‘design phase’ of the project.
Persaud noted that the developer, Mr. Cipriani, who was in Guyana recently to uplift the permit, informed the EPA that he found the draft permit “acceptable to him” for the design phase.
“As such, a final interim permit was issued to him,” Persaud disclosed.
“We issued the finalised draft permit to the developer and he is now required to provide us during that one year period with a number of outstanding information regarding the project…this information will be reviewed by us (EPA) and presented to the EAB for recommendations to be made,” the EPA Director divulged.