 Local Business CONTINUING COVERAGE It’s looking like 2007 will be a kinder year for the company that intends to develop an oil refinery in eastern Yuma County, the first to be built in the nation in some 30 years. "Things are coming together," said Dave Treanor, vice president of Arizona Clean Fuels. He’s said the company may be able to start moving ground by summer on the $3.5 billion refinery. Construction is expected to take three years. One hurdle, a guaranteed supply of crude oil for the refinery, has been cleared, Treanor said. "Canada has committed to all the crude we need if necessary." However, he said, negotiations with Mexico as an additional source of crude oil are going well with the installation of Felipe Calderón as the country’s new president. "With the new president, there’s a higher energy level to get things done," Treanor said. It helps that Calderón is Mexico’s former energy minister, Treanor said. "We’ve dealt with him before and he’s an enthusiastic supporter of the project." Meetings have been scheduled in early January with Pemex, Mexico’s state-owned, nationalized petroleum company, Treanor said. Also in January, Treanor said, he will be heading to New York and Washington, D.C., to continue negotiations for the financing. Paperwork has already been drawn up for the $1.8 billion in equity financing Arizona Clean Fuels needs, he said. He added that the equity investors will become participants as part-owners in the planned refinery. Once the equity financing is completed, it will serve as collateral for Arizona Clean Fuel to obtain a $1.5 billion loan, Treanor said. That, too, is well in place with commitments made by a consortium of banks in New York. Once the company has the money it needs, hopefully by spring, final engineering and design can be done to ensure the refinery will have optimum output while meeting the requirements of its air quality permit, Treanor said. Obtaining a renewal of that permit from the Arizona Department of Environmental Quality last summer was the biggest hurdle facing the refinery project, Treanor said. He expects a third hurdle to be cleared by early 2007, that of the transfer of the title to the land where the refinery is to be located about 40 miles east of Yuma. The land is currently owned by the U.S. Bureau of Land Management, which would sell the property to Wellton-Mohawk Irrigation and Drainage District (WMIDD). The district would then sell the land to Arizona Clean Fuels. A number of delays have hampered the land transaction. However, Charles Slocum, WMIDD manager, is hopeful the district will be able to complete the land transfer in the near future. "I still have my fingers crossed we can convert the title to Arizona Clean Fuels in the first quarter of 2007," he said. Joyce Lobeck can be reached at jlobeck@yumasun.com or 539-6853. © Copyright 2007 YumaSun.com |