Early last year, the chief executive of the Arkansas company working to build Arkansas’ largest economic development project — a $3.5 billion plant to turn natural gas into liquid fuel in Jefferson County — promised a springtime update on the endeavor’s progress.
More than a year later, thanks in part to COVID-19 and its consequences, Energy Security Partners CEO Roger Williams suggested putting off the update until September, when he expects to have more news to report.
Plans for the project were announced at the beginning of 2016 by the Little Rock firm, which has a leadership team that includes former U.S. Transportation Secretary Rodney Slater and former presidential candidate Wesley Clark.
Despite a chorus of naysayers calling the idea a pie-in-the-sky wish, Jefferson County helped with land acquisition near the Arkansas River, and ESP has cleared several engineering and environmental hurdles.
Rising oil prices have also lifted hopes for the project, whose financial model is less attractive when low oil prices limit arbitrage opportunities. “Oil prices have certainly changed, and many analysts believe they are headed higher,” Williams said in a brief email.
“I read a report this week that some traders are buying call options based on oil hitting $100/bbl by the end of the year. Anything is possible, but that sounds like gambling, though the options buyers might euphemistically term it as informed speculation.”
He said the GTL project’s profitability projections have “never turned on absolute oil prices, but on the arbitrage between oil prices and the barrel-of-oil-equivalent price of natural gas. That relationship has held up very well over the past ten years, whether oil prices are higher or lower.”
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