The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Freeport-based waste oil recovery plant is planning to increase its capacity six-fold, one of its major shareholders saying it expects the facility to be profitable by the 2013 second half.

TXO Plc, the UK-listed company that owns more than 30 per cent of Grand Bahama Group, disclosed in its recent half-year results filings that the latter was in discussions with “large multinationals” over the processing of oil slops and other waste from ships docking in Grand Bahama.

Revealing that the hydrocarbon recovery plant’s capacity is being increased from the 50 gallons per minute initially planned to 300 gallons per minute, TXO said the construction start depended on the Grand Bahama Port Authority (GBPA) approving an Environmental Impact Assessment (EIA).

In the meantime, Grand Bahama Group has begun constructing the plant in West Palm Beach, and aims to ship it “to the Bahamas on skids”.

This will reduce the on-site construction phase to six weeks, as opposed to the originally estimated six months, and Grand Bahama Group expects it to begin operations by the 2013 fourth quarter.

TXO said in its results statement: “Grand Bahama Group has become established at Freeport with a collection barge and a site prepared for the installation of a hydrocarbon processing facility.

“Although there have been delays in getting Barge ‘Martha’ signed off as seaworthy and operational, and in finalising plant design, due to the scale of the expected business opportunity increasing substantially, we expect Grand Bahama Group to be profitable in the second half.”

TXO said Grand Bahama Group had chartered Barge ‘Martha’, which has a one million gallon capacity, to collect ship slops and used lubricants. These will then be transported to the plant for recovery treatment.

“Following its commissioning in January of this year, a decision was taken in April to significantly upgrade ‘Martha’ so as to allow her to attend ships at anchorage,” TXO’s filing with London’s Alternative Investment Market (AIM).

“This will enable ‘Martha’ to collect the larger volumes of tank washings from the large oil tankers that visit Freeport. ‘Martha’ has been surveyed, and is expected to be certified to carry out such ship-to-ship services.

“Accordingly, Grand Bahama Group expects to enter into a contract with Svitzer tugs and extend its insurance cover so as to be able to commence this service by the end of the month [July].

“Barge ‘Martha’ therefore is expected to generate substantial and sustainable revenues from commencement and throughout the second half of calendar year 2013.”

TXO Plc confirmed that Grand Bahama Group was in talks “with a number of large multinationals for the processing of tank washings, ships slops and other types of used oils”.

This, it added, had prompted the redesign and expansion of the proposed hydrocarbon recovery plant facility to meet the increased level of expected business.

“The capacity for the proposed plant has been increased from an initial capacity of 50 gallons per minute to 300 gallons a minute,” TXO Plc said.

“Whilst this increase in design capacity has delayed the commencement of construction at the site in Freeport, the site has been cleared.

“The plant and equipment is currently being constructed in West Palm Beach (subject to contract), and on completion will be shipped to the Bahamas on skids. This is expected to considerably simplify and shorten the on-site construction phase of the plant from six months to six weeks.”

Envirologic International is preparing the plant’s EIA, which is expected to shortly be submitted to the Grand Bahama Port Authority.

“On-site construction will commence when the Environmental Impact Scheme (EIA) has been approved by the Port Authority, and Grand Bahama Group has sufficient profit reserves or the next round of funding obtained,” TXO Plc said.

“Grand Bahama Group still expects construction to be completed, and the plant to be operational, in the fourth quarter of 2013.”

The UK-listed company added that Grand Bahama Group was in talks with other investors over providing the construction financing and working capital requirements for the plant’s construction.

TXO increased its equity investment in the Grand Bahama Group by �700,000 ($1.1 million) during the six months to March 31, 2013, paying �350,000 in cash and �350,000 through the issue of 116,666,667 ordinary shares in itself.

This too TXO’s interest in Grand Bahama Group to 30.17 per cent. In addition, it also made a short-term, 10 per cent unsecured loan of �101,000 ($153,412) to Grand Bahama Group.

“TXO has an option over Grand Bahama Group to secure an additional 13.01 per cent for �1.876 million which is valid until December 2013,” the results statement added.