When I started writing for Arkansas Business 10 years ago, big news was breaking about plans to build a $3.5 billion plant to turn natural gas into high-quality diesel and jet fuel in Jefferson County.
Skeptics included some of my colleagues, as well as Arkansans who feared the economically depressed Pine Bluff region was being set up for yet another big letdown.
But the companies planning the plant, which would have been the biggest economic development endeavor in state history, assured everyone it was feasible.
As recently as 13 months ago, GTL Americas President Leon Codron told Arkansas Business that the project, backed by parent company Energy Security Partners of Little Rock, was on track, with luck, to start production by the end of 2030.
“There are some skeptics, and God bless them,” Codron said. “My answer to them is, ‘If you are right, we never would have got to where we are now. So ultimately you’ll become a convert.’”
But on Jan. 20, Codron found himself dealing with new skepticism from friendly quarters.
He appeared at a meeting of the Economic Development Corp. of Jefferson County to explain how Energy Security Partners wound up in default on its land deal for the plant site 15 miles northwest of Pine Bluff.
The default appeared to put the whole project, with its 2,500 construction jobs and 250 permanent positions, in jeopardy.
Lawyers for the EDCJC filed a Jan. 15 memorandum revealing that ESP missed a Dec. 31 financial closing deadline under its agreement with EDCJC, which owns the property.
The Pine Bluff Commercial, which first reported the default, said the Rose Law Firm of Little Rock, representing the EDCJC, put the default rent as of Jan. 1 at $176,216. If ESP doesn’t pay that amount within 60 days, it will face the option of losing the lease or buying the land at an option price starting at $2.87 million.
Codron told the EDCJC board that he had about $320 million in offshore accounts but couldn’t touch it before the deadline because banks and bankers were away for the holidays. Talk about fuel for skepticism.
Project leaders intend to buy the land, they indicated, and they’re modeling the plant on a GTL project that came online in 2024 in Qashqadaryo Province, Uzbekistan. They’ve engaged Hyundai, the same contractor that built the Uzbekistan plant, to lead the Arkansas project.
Codron did not immediately respond to a request for comment.
Wesley Clark, ESP’s founder and the retired Army general and former presidential candidate, told Jefferson County leaders that his team was mixed up about the financial closing deadline, which he thought was in February.
“If you want to terminate this deal because you believe we’ve been bad businessmen, we understand,” Clark said at the meeting.
About $100 million has already been invested into the gas-to-liquids project, including $20 million on the site, ESP leaders said. The Arkansas Teacher Retirement System has a stake of at least $20.7 million.
The economic development corporation took no action at its January meeting, though board member Joni Alexander Robinson asked if the board could consider a request from ESP to extend the financial closing deadline for six months. Another board member, Chuck Morgan, suggested that ESP take the matter up with lawyers at the Rose Firm.
In its deadline extension request, ESP said it needed four to six weeks to get the money from its offshore bank accounts. The economic development corporation is expected to examine the matter again in its February meeting.
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