Quanten, Eagle LNG eye Aruba energy projects

  • Market: Crude oil, Natural gas, Oil products
  • 12/10/20

Aruba is betting on Quanten Consortium Aruba and Eagle LNG to restart a dismantled oil refinery and develop the surrounding site in an ambitious initiative promoted by the US government.

In a dual-track tender launched early this year, the Dutch Caribbean island's government selected the two US companies to negotiate separate but complementary projects.

San Jose, California-based electrical contractor Quanten is undaunted by growing surplus refining capacity and refinery shut-ins around the world. "This is not just about the refinery," Quanten chief executive Jeff Myers told Argus. "We're going to make this a showcase. Refineries are not going away in the near term. We're going to show how a refinery can reduce its carbon footprint."

Among the US contractors cited by Myers as Quanten collaborators are KBR, McDermott, Honeywell, Cisco Systems and Chem-energy, as well the University of California Berkeley Renewable and Appropriate Energy Laboratory. "We have put together a team of fantastic companies," Myers said. None of the firms responded to a request for comment.

The Quanten group will invest up to $3.5bn in Aruba, Myers said, adding that the goal of the project is ultimately to help the island diversify its economy, explore trade opportunities and build up educational resources. The US State Department has advocated on behalf of the project, and facilitated introductions to move the concept forward, he said.

Myers says he is hoping for a signed agreement with Aruba's state-owned RdA by the end of March, with partial refinery operations to begin within two years, depending on design plans and equipment supplies.

Houston-based Eagle LNG's proposal is part of a wider Caribbean bunkering and small-scale supply strategy. "By investing in the economy of Aruba, we look forward to creating employment for Arubans while lowering energy costs, spurring economic development, and providing cleaner fuels," Eagle LNG told Argus. "We are awaiting further communication regarding next steps."

The privately held company signed a turnkey gas supply contract in October with the Barbuda Ocean Club resort for power generation, using ISO containers loaded at its Maxville, Florida, facility. Eagle is planning a new larger, on-water liquefaction plant and terminal in Jacksonville, Florida, capable of producing 1mn t/yr of LNG with 45,000m³ of storage.

Assets in distress

Earlier this year, RdA issued a request for expressions of interest along two tracks: one to refurbish and restart the 235,000 b/d refinery — formerly operated by US refiner Valero — and another to develop additional industrial activities on the site, including LNG transshipment, petrochemical facilities and renewable energy.

Quanten Consortium Aruba LLC won the first track of the Aruban tender, and Eagle LNG won the second.

Quanten and Eagle LNG are the latest candidates to revive Dutch Caribbean assets that used to be operated by Venezuela's state-owned PdV. Curacao's efforts to find a new operator for its own refinery have so far faltered. In the case of Aruba, PdV's US refining subsidiary Citgo was supposed to refurbish the refinery in a $1.1bn project dating back to 2016. Little progress was made, and the project collapsed altogether after Venezuela's US-backed opposition wrested control of Citgo from PdV in 2019.

The Aruba refinery was operating at about 145,000 b/d of throughput at the time of its closure in 2012. The refinery was capable of processing sour crude into intermediates and some finished distillate fuels.

As in Curacao, Aruba is separately seeking to lease out oil storage tanks. Aruba's initial award to Estonian distressed assets specialist firm Emqore was recently terminated. Curacao terminated an agreement with SPS Drilling E&P shortly after it was signed.


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