Upper Demerara River businessman Wasir Mohammed, and international company Chemtech Limited have partnered and applied to the Environmental Protection Agency (EPA) for permission to build a US$200 million Oil Refinery & Integrated Post Petrochemical Manufacturing Complex.
The company hopes to produce fertilizer that can be sold and bought at a cheaper cost here.
While the fertilizer plant is at the forefront of the investment plan of the company, the application also includes a request to the EPA to construct an oil refinery, which the company says it can do in two and half years. However, no detailed plans for the refinery were included in the project plan. “Basically we are going to do the fertilizer. We [Guyanese] will be able to source it at least 30% cheaper,” Mohammed told the Stabroek News as he stressed that all plans rest on getting EPA and other necessary permits. The details of the company’s plans can be found on the EPA’s website. The proposed site for the fertilizer plant is on the right bank of the Demerara River between the Silver Hills and Dora communities in an area called Plantation York. This newspaper understands that Plantation York was once owned by a British Guyanese writer, and had been put up for sale for some time.
Mohammed said that the lands, divided into two sections, are all private and as such the company is not looking to government to meet this need. “I am the land owner so it is private and not anything with government,” he said.
In its project summary, Chemtech describes itself as “a special purpose company” registered to establish energy and non-energy industries in the country. A special purpose company, also called a special purpose entity (SPE), is a subsidiary created by a parent company to isolate financial risks. Its legal status as a separate company makes its obligations secure even if the parent company goes bankrupt.
The proposed financing of US$200 million for its integrated chemical complex will be sourced from offshore financial services provider United Securities Trust of Switzerland. Mohammed said that Chemtech has other branches in other countries. Asked if Chemtech here is the same company listed in Trinidad and Tobago, Mohammed said “yes, I think so.” The Integrated Chemical Complex, according to Chemtech, will process Methanol further downstream to produce Formalin, Para Formaldehyde, Phenol Formaldehyde, Urea Formaldehyde and Urea Melamine Formaldehyde, which will be used to produce: Oriented Strand Board (OSB), Veneer board, NPK (Nitrogen, Potash and Potassium) fertilizer and, Sulfur Coated Urea (SCU) slow-release fertilizer. “The project will be a pioneer in Guyana for processing 1st stage downstream products to marketable products that can generate both revenue from exports and domestic profit, training employees for higher skill jobs and employment in the country. As a result of the aforementioned Guyana will be producing world class products for domestic and international markets,” the plan states.
It notes too that the projects will be developed on a phased basis. “First Phase: Integrated Chemical Complex. Second Phase: this complex will require a Port in the second phase, this will include ship building and repairs, and this will also service the onshore and offshore Oil and Gas industry.” The company is clear that while byproducts from Guyana’s gas-to-shore project can used to make fertilizer, it will not be relying on that project to start its business as it plans on importing the chemicals needed to produce. “There is no need for natural gas for this project. This project is designed to utilize the products already made from the natural gas, such as methanol and urea. The Formalin Plant capacity is 55,000 Tons per Year (TPY) this plant will process 55,000 TPY of methanol, the average methanol plant capacity is from 150,000 Tons per Day (TPD) to 500,000 Tons per Day (TPD). At this time, it is feasible to import the methanol because the quantity required is very small. The methanol will be imported in specialized containers until a methanol plant is built to supply local consumption. This is a safe and reliable method used worldwide,” the project plan states.
It lists other chemicals and processing capacity while repeating that they too will be imported, using safe global standards. But if and when the gas to shore project has the byproducts for sale, the company said it will be happy to buy it. “However, in the future when the Gas to Shore project comes on stream and methanol and Urea plants are built Chemtech will be happy to purchase from the local plant,” it adds.
And apart from producing fertilizer, CHEMTECH says that of its six plants, one will produce veneer boards and other wood products, where raw material will be sourced from locals. “The Veneer Board plant will produce 18,155 cubic meters of wood per annum, this plant will utilize the products from the Formalin plant. The Oriented Strand Board plant will process 80,000 Cubic Meters of wood per annum, this plant will utilize the products from the Formalin plan,” the plan states. “The wood industry will avoid the export of raw logs by adding value to Guyana natural resources,” it said. Of its six plants, the company lists key industry applications for their manufactured products. For Formaldehyde it lists the Textile Industry and Automotive Industry; Para-Formaldehyde serves the Chemical Industry, Wood-based Panel Industry, Automotive Industry, Furniture and Construction Industry and Energy Business & Agriculture sectors.
Veneer Boards serves the Furniture and Construction Industry and flat panels which are used to construct desks, counter tops, panels for cabinets, doors, and parquet floors. Oriented Strand Boards produced are also used in the construction industry and its engineered and laminated timbers, boards and plywood for a number of projects. Fertilizers will serve the agriculture Industry as most are applied in a variety of agricultural applications. Chemtech says that if approved, the project would create over 300 permanent jobs and 750 during its construction. The benefits to Guyana are, “… several business ventures in the value added chains of timber logging and processing, petroleum, natural gas, mining and processing, including the relevant downstream industries and trading thereof respectively.”
