The Tribune

By NATARIO McKENZIE

Business Reporter

nmckenzie@tribunemedia.net

THE developer behind the proposed $5.5 billion oil storage terminal and refinery for Grand Bahama yesterday pledged that 80 per cent of jobs will go to Bahamians. Peter Krieger, Oban Energies' non-executive chairman, speaking at the signing of a Memorandum of Understanding (MoU) with the Government, said the project would create "long-term, sustainable" jobs for this country's citizens.

Disclosing that construction of the east Grand Bahama project will likely start before year-end, Mr Krieger added that Oban Energies was committed to a local supplier and employee programme.

"Our employment programmes will preserve 80 per cent of the jobs for local Bahamians. These jobs will be long-term, sustainable and underpinned by training programmes," he said.

"Our training and education programmes include a commitment to invest in local universities, provide on-the-job training and structured training programmes such as vocational apprenticeship and management training."

Mr Krieger added that Oban Energies will also provide long-term housing for up to 200 local residents exclusively, located 10-20 miles way from the terminal, as he sought to allay concerns over whether the developer has the necessary financing.

"We have all of our financing in place," he said. "We have already spent a significant amount of money; many millions of dollars in pre-construction to this stage. We have done our geo-technical work, our environmental studies and our marine engineering. There has already been a significant investment.

"However, in order to move forward with the banks we need to deliver certain deliverables such as our approvals from the Government, our permits and everything. Once we have delivered all of that and there is a project to fund, we will start drawing down on the money from the bank. We just have to go through the normal process now that any financial institution would require you to go through before they allow you to access those funds."

Mr Krieger said Oban was already in talks with major international energy firms, which they would partner with to help run and maintain the facility.

The Progressive Liberal Party (PLP), though, has expressed concerns over the Oban deal, with shadow finance spokesman, Chester Cooper, pointing that the developer was a "relatively new company" with no established track record in the energy infrastructure business. He also questioned whether Oban has the necessary financing, adding: "Show me the money."

Prime Minister Dr Hubert Minnis pushed back against these concerns, saying the Bahamas Investment Authority(BIA) would have done its due diligence on the company.

The last Ingraham administration issued an approval in principle to Oban Energies, but the project progressed no further because it was not satisfied the developer had sufficient evidence of financing. In an interview with Tribune Business last year, Mr Krieger said previous efforts were derailed by the global downturn about a decade ago.

Seeking to differentiate Oban's project from similar developments on Grand Bahama, such as Buckeye Partners' BORCO facility and Statoil, Mr Krieger said: "The refinery is a major asset that differentiates us from Buckeye or Statoil's facility.

"This allows us to process crude and refine it, and opens up a market much larger than just storage. The storage support needed for the refinery is quite significant. It allows us to have a much more diversified group of customers, and offers a lot more different products and services to those customers."

Former PLP chairman Bradley Roberts, in a recent statement, questioned how the project can produce 600 "direct jobs" as the Prime Minister previously announced in the House of Assembly. He added that Buckeye, which has a storage capacity of 26 million barrels and can berth up to eight vessels, employs 160 persons including non-Bahamian staff, while Statoil (the former Burma Oil storage facility) located in east Grand Bahama has a capacity of seven million barrels used primarily for the storage of crude oil, but employs only 60 persons.

Dr Minnis explained that the other facilities are only concerned with storage, while Oban's facilities will also a refinery, producing the difference in job numbers.