Although its project to bring North America’s first gas-to-liquid facility online in Jefferson County is now in jeopardy, officials with Energy Security Partners — the parent company of GTL Americas — expressed their desire to stick with plans.
GTL Americas CEO Roger Williams, GTL Americas president and Energy Security Partners chief development officer Leon Codron, and Energy Security Partners founder and chairman retired U.S. Army Gen. Wesley Clark aired their latest plea to the Economic Development Corp. of Jefferson County on Tuesday, when it was revealed the Little Rock-based energy firm was in default due to missing a financial closing date of Dec. 31. Codron said Energy Security Partners will try to cure the default within a 90-day period, per the contract, telling EDCJC an estimated $320 million needed for closing is still in overseas banking.
EDCJC leaders blamed Energy Security Partners for not accepting a two-year extension on a lease agreement through Jan. 1, 2028 during an October board meeting. The amendment, which would have been the fifth to the original contract from March 2016, would have taken effect Dec. 1.
“When we left the meeting, we made a decision to purchase the land and raise the funds,” Codron said Tuesday. “We thought we could do it before year end. When it became apparent (otherwise), we advised the alliance (Economic Development Alliance for Jefferson County) we could not make that date.”
The alliance is different from EDCJC in that it was formed in 1994 when a now-defunct industrial foundation that created Jefferson Industrial Park joined forces with the Pine Bluff Regional Chamber of Commerce to do business, according to alliance President and CEO Allison Thompson. The EDCJC is a countywide board that was first formed in 2011 thanks to a 5/8-cent sales tax for economic development that sunset in 2017 and has a contract with the Alliance for certain services, Thompson said.
Independent reporting for Pine Bluff & Jefferson County since 1879.
The alliance was notified Dec. 18, Codron said, adding he notified the alliance of the energy firm’s intent to purchase the land but also that Energy Security Partners could not sign the contract.
“An agreement needs to be negotiated,” Codron said. “We got the first draft, and there needs a lot of clarification, in terms of confidentiality provisions, obligations on asks that we cannot fulfill.”
Codron blamed the lack of available finances on international banking regulations and transfers.
“A lot of funds that come into the United States, you have to prove the origins of the funds,” Codron said. “It goes through a very significant progress.”
Roger Williams, CEO of GTL Americas, told EDCJC he takes full responsibility for not accepting the contract amendment but pointed out the fourth amendment to the agreement allows Energy Security Partners to exercise a purchase option.
“Our goal is, we want to be here. We want to go forward,” Williams said in asking EDCJC not to go forward with any termination plans.
Williams added Energy Security Partners is focusing on efforts to get to closing. Energy Security Partners leaders say they can secure the estimated $320 million in offshore funding within four to six weeks.
EDCJC Chairman Scott McGeorge expressed his frustration over the missed financial closing deadline but did not commit to either terminating the contract with Energy Security Partners or granting them more time for closing.
“Some voted for their surplus and some voted for their need,” McGeorge said. “They sacrificed to pay the tax with the idea we get jobs and we get assessment, something to assess for Jefferson County. It’s been a long time in that aspect.”
Joni Alexander Robinson asked McGeorge during the meeting whether it was worth forgoing a six-month extension that Energy Security Partners requested after 15 years of a shared commitment toward the hope of a GTL Americas facility.
“The board, during that meeting in October, requested documentation,” McGeorge said, on progress updates for the project. “The highway department is public. I can call up there and get about anything from them, and they can tell me, ‘This is where we are on that project.’ … I don’t think those things are confidential. I think those are things they chose not to comply with.”
GTL Americas’ plan to build a $3.5-billion gas-to-liquid facility in the Jefferson area was marketed as the largest industrial project in Arkansas, according to a September 2023 prospectus. GTL Americas achieved a milestone at the time when it signed an agreement with Hyundai ENG America and S&B Engineers and Constructors for front-end engineering and design.
Jefferson County was chosen as a location for the facility, which would be the first of its kind in North America and eighth in the world. Energy Security Partners leaders have spoken of the region’s economic challenges and the location’s access to the Arkansas River and other pathways of transportation as reasons for its selection.
The project was expected to hire about 2,500 construction workers and up to 250 full-time employees during Phase 1 plant operations, with commercial operations to launch by either 2029 or 2030. GTL Americas’ expectation is to produce 41,000 barrels of crude oil per day.
Per Energy Security Partners’ contract with EDCJC, signed March 30, 2016, at least 225 of the Phase 1 jobs were to be established with a minimum hourly wage of $40 plus benefits.
The original contract called for a financial closing deadline of July 1, 2020, but that was almost four months after covid-19 was declared a pandemic. Codron said the first four years of the contract went according to plan until the pandemic declaration, which the World Health Organization declared March 11, 2020.
Codron added it took seven years to obtain permits for the facility. Codron also blamed price inflation, tariffs and a disruption in supply, among other things, for the delay in developing the facility.
Codron added GTL Americas now needs to secure gas supply, sell its product and obtain a lump-sum, turn-key price for the facility.
“Why do we come back?” Codron told EDCJC. “We like it, but for one thing – we need the road.”
He was referring to a road that needs to be constructed to connect Interstate 530 with the 1,142-acre property Energy Security Partners wants to buy.
For now, Energy Security Partners will reach out to attorneys from Rose Law Firm, which represents EDCJC, to try and cure the default. EDCJC will meet again Feb. 17.