Week of June 20, 2005
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Hitting for the Cycle
by ADAM BRUNS, Site Selection Managing Editor
During one week in June, a Spanish-Latin American energy company addressed at least two oceans' worth of its LNG strategy.
On June 7, Spain-based Repsol YPF and Canada's Irving Oil signed agreements to develop a US$750-million LNG import and regasification terminal in Saint John, New Brunswick, Canada, the first complex of its kind on Canada's East Coast. Key to the decision was a strongly opposed measure by the city's common council that froze property taxes at CA$500,000 (US$406,000) annually for 25 years.
The new operation to be constructed, owned and operated by the newly formed company Canaport LNG will have a capacity of 10 billion cu. m. (353 cu. ft.) per year of regasified LNG.
"This agreement is a key element for Repsol YPF's LNG projects in the Atlantic Basin, one of the principal vectors of growth for the 2005-2009 period as outlined in Repsol YPF's Strategic Plan," the company stated. For Irving Oil, it represents a crucial step in reaching Southern New Brunswick's goal of energy hub for North America's Eastern seaboard.
On June 2, Repsol reached an agreement with U.S. concern Hunt Oil regarding its strategy for Peru LNG and the Camisea fields that will mean the installation of a liquefaction facility in Pampa Melchorita, Peru. And again, the Spanish company referred to its strategic plan, "which contemplates growth in upstream and increasing the company's presence in those areas and businesses where there are high levels of profitability, such as the integrated LNG businesses in the Pacific Basin."
Once operational, the plant will draw raw material from the Camisea fields according to a separate 18-year agreement with upstream license holders. Plans call for shipping the LNG approximately once every five days.
In a detailed release, Repsol YPF explained the components needed for the complex, including "a unit for the reception and processing of natural gas; tanks to store the LNG; port facilities to load the LNG onto ships, including associated piping and a breakwater to create an area of calm water suitable for marine loading operations; administrative facilities, maintenance shops and warehouses; housing facilities for workers and associated sewage treatment."
In other words, both structure and infrastructure. That includes a desalination plant that will provide both potable and process water. The company plans to be self-sufficient for both water and electricity, using natural gas-powered turbine generators to meet its power needs. Related projects include construction of a gas pipeline from the Camisea fields to Lima, and a liquid export line.
Like the Atlantic Canada project, the site selection for the Peruvian plant was not without its hiccups. Only in this case, it had more to do with culture than tax base.
In this case, the originally chosen and most technically favorable site was Pampa Clarita, located 96 miles (154 km.) south of Lima. But as the company explains, "an archaeological site evaluation led to the discovery of the mummified remains of a two-year old boy that had lain under Pampa Clarita for an estimated 500 years. In an effort to avoid disruption of the area's rich cultural heritage, the decision was made to discard Pampa Clarita as a possible site."
Optimal for Optical
by ADAM BRUNS, Site Selection Managing Editor
Up to 200 jobs will be created in Rochester, N.Y., as a result of a June 9 announcement by Bausch & Lomb that it would nearly double its R&D center in the city with a $35-million investment.
Five days later, one of the conditions of that investment was met, as the Rochester City Council voted to include a 22-acre (9-hectare) portion of the Optics Center campus in the City of Rochester Empire Zone, an action that, when approved by Empire State Development, will allow Bausch & Lomb to apply for various tax incentives through the Empire Zone program.
Meanwhile contact lens maker Coopervision said June 17 that it would invest $8 million in equipment and hire 225 people for a distribution center in nearby Henrietta that it will lease after a developer invests $12 million to construct it.
Not a bad week for Monroe County and the Empire State.
Momentum Builds ... Literally
The Strong Only Grow Stronger
by ADAM BRUNS,
Site Selection Managing Editor
Following immediately in the wake of the dual South Carolina investments a few weeks ago by Canadian firm Grant Forest Products, fellow Canadian firm Norbord Inc. announced on June 15 a $135-million, 75-job investment to double its footprint in Cordele, Ga.
Construction is already under way, and scheduled for completion in late 2006.
"Canada is an important business and trading partner for Georgia, and this expansion illustrates the strong ties we have established," said Governor Sonny Perdue.
That relationship was reiterated later in the week in a speech by Canadian Ambassador to the U.S. Frank McKenna, before a group of diplomatic, government and business leaders at the Federal Reserve Bank of Atlanta.
As many as 152,000 jobs in Georgia are supported by Canadian trade, said McKenna, whose pedigree is more business than diplomacy. He joked that doing business with Canada can frequently enable Georgians to jump right past "those damn Yankees" to get things done. Canada wishes, meanwhile, that it could jump right past what McKenna called the "tough nut" of softwood lumber issues: "Crack that nut and we could really go places," he said.
Meanwhile, the wood and glue that make up OSB are holding together just fine for both parties.
Housing Drives OSB Demand
In addition to the cost-effectiveness of expandind at an existing location, Toronto-based Norbord found that the Cordele mill was in an optimal position for both fiber supply and markets.
"Expansion of the Cordele mill is consistent with our plan to continue growing our North American OSB business, particularly in the U.S. South where new housing construction is robust," said Norbord President and CEO Barrie Shineton in April, when his board of directors first approved the project, pending permitting. "In addition, the low-cost position, experienced work force and proven technology already in place at Cordele will ensure a fast start up with relatively low risk." He predicts that 200 additional jobs will be created by others in the region as a result of the Norbord expansion.
That expansion will enable the mill to add capacity of approximately 550 million sq. ft. (51 million sq. m.) of 3/8-inch panelboard product, taking the mill's annual capacity over the 1-billion-sq.-ft. (92.9-million-sq.-m.) mark. That in turn will ratchet up the company's North American and European capacity to approximately 5 billion sq. ft. (464.5 million sq. m.), at 11 mills.
The Cordele operation was built in 1991 and has been rated as one of the company's safest facilities. Norbord bought the mill in 2002. Other southern U.S. OSB mill locations include Huguley, Ala.; Guntown, Miss.; Jefferson and Nacogdoches, Texas; and Joanna, S.C. The company the second-largest OSB producer in the United States also operates a U.S. OSB mill in Bemidji, Minn., as well as a medium-density fiberboard mill in Deposit, N.Y.