The Peregrino crude oil is a special product from Brazil known for its viscous properties and is almost solid at room temperature.
As a result, it must be transported at high temperatures and blended with other crudes at the Grand Bahama plant before it can enter the United States.
In an interview with The Freeport News yesterday, general manager Delton Russell and terminal advisor Bent Pedersen said plans have been moving smoothly with the first phase of work at the plant, including cleaning up of the premises.
“A part of our responsibility, given the new lease agreement with the government, is that we clean the facility up and so we have been doing pretty good at cleaning up the soil and working on cleaning up the water,” Russell noted, adding that the majority of the clean-up was for aesthetic purposes.
“We have also done quite a bit of tank painting so that’s a program that we have ongoing as well. We have one more that will be domed and over the years as we take tanks out of service for servicing and upgrading we will be looking at the potential for installing domes as well.”
In preparation for the Peregrino project, Russell notes that the company does intend to install a pipeline from the shore to the jetty and is also looking at installing two new manifolds onshore.
He added that additional pumps may also be installed on the premises.
According to Pedersen, there is not much need for physical expansion to the plant to facilitate the new volume it expects to deal with.
“We don’t need to expand physically to increase the turnover so with the present capacity, we have the ability to have a much higher through-put, so we expect to increase turnover with the same equipment, so to speak.”
“It (the terminal) was rented out 100 percent, so we can’t say it was under-used but we will see as an owner that we will have a much higher turnover than historically.”
That higher turnover naturally also will have positive side effects for the community, he furthered.
“Higher turnover means higher income that we will have, higher duties because we pay turnover based duties and we will have to employ more people.”
Although the prior owners had leased tanks to clients for storage, Pedersen explained that is not the primary intent of Statoil.
“When we bought this terminal, we bought it because we saw that we would use it for our own purposes. We would use it primarily for the Peregrino oil coming from Brazil but also use it for African crudes and north sea crudes into the U.S. So we saw that there will only be one client here and that is Statoil. We won’t exclude leasing it out. Its not a no-go for us, but it’s not our intention in the outset.”
Pedersen acknowledged that there are a few refineries that can accept the Peregrino oil at such a high temperature and said the company intends to work on finding such refineries since the blending process is an expensive operation.
As for the possibility of hiring additional persons with the company moving forward with its plans, Russell said that the quantity is still under consideration.
“We have not employed any additional persons. We still have about 55 regular employees and we’re currently reviewing our manpower requirements, what we have today against what we expect to have within the next year or so when we start to operate with the Peregrino cargo,” he said.
“Along with that we have anywhere from 15 -30 contractors on site at any given period.”
However, Pedersen stressed, once the need for additional employees becomes apparent, the company will make it a point to notify the public and make the process as open as possible.
Russell said the company will host a community based meeting for all the sub-contractors who would like to put themselves in a position to work along with the major contractor.
“It gives them an opportunity to meet and make contact so they can start the ball rolling to see what they can do to provide that service to the contractor who comes in,” said Russell.
The positions that will most likely be available will be highly skilled ones, he noted, and all welders, electricians, and the like will be required to have certification.
“One of the ideas is to ensure that individuals know what level of certification the contractors will require so that they can prepare themselves in the event that they want to provide the service.”
In November, Statoil completed the acquisition of shares of South Riding Point Ltd.’s three Bahamian subsidiaries, South Riding Point (Bahamas) Ltd., South Riding Point Terminal Ltd. and South Riding Point Tugs Ltd., and its 50 percent interest in Freepoint Tug & Towing Services Ltd. which operates a fleet of tugboats in The Bahamas.
The final purchase price for the shares was U.S.$258,249,163.
In addition, the Company was paid for working capital and related items.