New London refinery project ‘changes hands’

Coming soon?

A new ownership group has taken over the charge for the construction of a refinery near New London. This change was announced earlier this week, after the original leadership officially ended their efforts.

While Rusk County elected officials are understandably nervous about one group ending their efforts and a new group coming in, they are still hopeful the Rusk County refinery will become a reality.

“We have been aware of the possible restructuring since the funding plan fell apart in the last two weeks of December,” said Tommy Alexander, superintendent for West Rusk County Consolidated Independent School District.

“There has been a lot going on behind the scenes since then on new leadership, and while we are not in the loop on those changes we are confident this group will work very hard to see this refinery project completed.”

Alexander was glad and excited the new group still wanted the refinery to be constructed in Rusk County in the middle of the oilfield, and he was complimentary of the new leadership that has been put into place.

“There is a real good possibility that it (the refinery) is going to happen because this group’s ability to raise funding is out of sight and they have other projects of the same magnitude going on in different areas of the country,” Alexander said. “All of them are successes and we firmly believe we are going to see the same thing here.”

Alexander said it is possible that things could begin happening six months down the road and, by summer, the group could be moving on the land.

“The game is on, and we are still in the game,” he said.

New London Mayor Dale McNeel was unavailable for comment but has said in the past that the city is firmly behind the construction of the refinery in Rusk County.

Rusk County Commissioner Pct. 1 Bill Hale, the official whose precinct will inherit the refinery should it become a reality, is hopeful that the new group will push the project through.

“The only thing I can say is that I have high hopes that this refinery will become a reality, and we are all very hopeful that the new group will push this project through to completion,” Hale said.

Coleman Ferguson, a Texas resident with a Tulsa, Okla. oil company, is the principle agent in the new group, officials said, and the new name given to the project is Rusk County Refinery. Ferguson was a part of the original group although not in the leadership role.

Proximity to the Keystone XL pipeline being built in East Texas is said to be one reason for continuing interest in development of a refinery in Rusk County. The pipeline is 15 miles away from the proposed site as well as some railroad availability. Officials also said the property lends itself well to the type of facility they are wanting.

Ken Williams, owner of Gregg County Refinery and the principle agent for the original group pushing the development and construction, made it official this week that the effort from his group was over.

Duane Gordy, a spokesman for the new ownership, made the announcement following Williams’ statement that there is a new conglomerate that is picking up the project and trying to make it a reality.

The location of the refinery will remain the same,  officlals said, and they also added they are still hoping to work with the Angelina-Neches River Authority on the funding mechanism.

Kelly Holcomb, executive director with ANRA, agreed the authority is still interested in helping the ownership group secure tax-exempt private activity bonds, adding his organization looks at the project through various aspects for potential funding.

He said some aspects dealing with the environment, including air quality, could qualify to be tax-exempt while others are low-interest.

The land selected for the refinery, but never purchased, is a little more than a mile southeast of the intersection of Texas Highway 42 and Texas Highway 323, officials said.

Rusk County tax records show 150 acres for the project were owned by Near Bore Resources. The Texas Railroad Commission in April 2011 issued a final order against the owners of Near Bore Resources regarding environmental issues arising from groundwater contamination.

Gordy said the group wasn’t wanting to buy the liability but left it up to the owners of the property.

But, the new ownership group still favors the property because certain aspects of the land would save millions in construction costs.

New owners also want to locate the refinery within the Angelina-Neches River Authority jurisdiction, Gordy said. He said the Sabine River Authority, the group who administrates land just to the north, did not show any interest in the project.

Gordy said the new ownership group is larger than the original.

He said current plans are bigger than the old. The project is up to $210 million, but he said things of this size do not happen fast. He also said he does not expect to see anything on the ground before 2014.

Original estimates envisioned 400 construction-phase jobs and about 85 permanent positions in the refinery.

The original ownership nucleus was relying on getting some tax exempt bonds to fund the project, but efforts to make that happen died in late 2012 and ultimately ended the group’s efforts to continue with the project.

Williams’ plan called for utilizing the long-idled Longview Refinery on Premiere Road in that Gregg County town as a terminal and portions of the refinery equipment was to be dismantled and used at the new site.

In the original plan, $182 million in low-interest Hurricane Ike bonds administrated through the Angelina-Neches River Authority was to be used as the financing mechanism for the new facility. The total cost for the project was estimated, originally, to be in excess of $300 million.

The attempt to move forward was halted in late 2012 after all attempts by the group to receive the tax-exempt bonds either failed or were stalled.

Gordy was also involved in the original effort and said not getting the Hurricane Ike bonds definitely changed the funding mechanism.


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