Gas-to-Liquid Plant Near Pine Bluff Takes Major Financing Step

Gas-to-Liquid Plant Near Pine Bluff Takes Major Financing Step
Roger Williams

With a $30 million investment commitment from the Arkansas Teacher Retirement System, plans to build a $3.5 billion plant to turn natural gas into refined liquid fuel near Pine Bluff reached a significant landmark this week.

By securing funding for front-end engineering and design, Energy Security Partners of Little Rock has taken a major step toward what would be Arkansas' largest economic development endeavor ever. The facility, which would create an estimated 2,400 jobs during construction and eventually 225 jobs at the plant itself, would use a time-tested chemical process to turn America's abundant and inexpensive natural gas into 33,000 barrels a day of ultra-clean transportation fuels.

As first reported in the Arkansas Democrat-Gazette, the state's teacher retirement system's investment committee voted Wednesday to approve putting up to $30 million into the project, led by ESP CEO Roger Williams and Arkansas associates Wesley Clark, the former NATO general and presidential candidate, and Rodney Slater, who was U.S. transportation secretary under President Bill Clinton.

Mike Preston, executive director of the Arkansas Economic Development Commission, praised Williams and his team "for taking this important step in securing the necessary funding" to advance the project. "Roger and his team have traveled the world to secure this funding," he said in a statement. "This achievement shows that their hard work and commitment is paying off as this project continues to push forward."

The project, with its outsize price tag, has generated significant skepticism since the Jefferson County site was first suggested nearly three years ago. But Williams has never doubted the project's sound prospects, and he told Arkansas Business in February that a commitment for front-end engineering design, known as FEED, was imminent. He called it a "major milestone."

"For a project of this size, FEED studies can take 12 to 24 months," he said at the time. "These are done for every major industrial project around the world."

Technip France, a subsidiary of TechnipFMC, will be the FEED contractor. The company has specialized in large-scale GTL projects in Uzbekistan and Qatar. Williams had said the contractor would have "great depth of experience in building things like refineries or liquid-to-gas production plants and large petrochemical processing facilities."

In a news release, Williams expressed gratitude to the Jefferson County Alliance for Economic Development, the County Tax Board and the businesses and civic leaders in the Pine Bluff area.

"Negotiating a FEED contract is a major undertaking, and it's going to require a tremendous outlay of capital to get done," Williams said in February. "Once we start the process, we have a 21- to 24-month process to get to what is called financial closing. In the industry, that's called the financial investment decision date. At that point, all the money will be committed, and the project will begin construction almost immediately."

Lou Ann Nisbett, president and CEO of the Jefferson County Alliance, said that "if the message is still not out, Jefferson County and the entire state of Arkansas is open for business, and we can compete for big projects" like this one. Construction and completion of the plant is expected to take about 40 months, and the ESP team hopes for a plant start-up in late 2023.

George Hopkins, executive director of the teacher retirement system, told the Democrat-Gazette that he expects European Union and Asian governments to invest between $600 million and $900 million in the project. The system will reserve another $10 million for a possible additional investment.

ESP said that beyond the retirement system, its financing consortium includes a major petrochemical and refining company as lead investor. The lead investor "may partially transfer its right of first refusal to Morgan Stanley Infrastructure Inc. to provide a substantial portion of the equity needed" for development, the company said.

"We are extremely pleased to have a strong consortium of strategic and financial investment partners, as well as leading technology and construction partners," said Leon Codron, ESP's chief development officer and president of GTL Americas, ESP's affiliate company.

The project includes cooperation and licensing deals with Axens North America Inc., a provider of advanced technology that will license its Gasel Fischer-Tropsch technology to turn the gas into diesel and other fuels, and Haldor Topsoe, a global leader in high-performance catalysts for the chemical and refining industries.

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