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Published Friday, March 21, 2008
IDA adds to Hunt Refining incentives
IDA adds to Hunt Refining’s $50 million in GO Zone bonds
By Matt Hawk Staff Writer Tuscaloosa NewsTUSCALOOSA | The Tuscaloosa County Industrial Development Authority board of directors on Thursday authorized the release of $50 million in tax-free Gulf Opportunity Zone bonds that will help finance the $675 million expansion of Hunt Refining Co.
The IDA board also approved $25 million in taxable bonds for the Hunt expansion, which board member Mike Smith said could become tax-free if Hunt receives additional GO Zone funding. That could happen if other projects fall through that have been allocated GO Zone bonds.Alabama received $2.2 billion in GO Zone bonds as part of the federal Gulf Opportunity Zone Act of 2005. Nearly all of that money has been allocated to projects throughout Alabama’s 11 GO Zone-eligible counties. Hunt originally requested $100 million in GO Zone bonds from the state.
Announced in July 2006, the Hunt expansion is expected to double the refinery’s output of diesel and gasoline and create about 40 jobs.The expansion will include three major new units at the west Tuscaloosa refinery: a $50 million continuous catalytic reformer, which produces gasoline; a $200 million hydrocracker, which produces diesel fuel and gasoline; and a $200 million expanded delayed coker, which allows the refinery to process more and different kinds of crude oils.
The expansion, which will be completed in 2010, is the largest private investment in Tuscaloosa County since Mercedes-Benz U.S. International’s $600 million expansion of its Vance plant, which was announced in 2000 and completed in 2005.
The authority also amended 10-year property and sales tax abatements it had issued in 2006 for Hunt’s expansion to reflect rising project costs. Originally projected to cost $500 million, the cost of the expansion has increased by another $175 million.
In January, Drew Altemara, spokesman for Hunt Refining Co., said the increase was due to rising construction and materials costs. Ronny Rhodes, chairman of the IDA review committee, said such increases are not uncommon and did not change the financial returns of the project significantly.“Things just cost a little more than you expect,” Rhodes said. The expansion is expected to generate more than $66 million in new tax revenue over the next 20 years. Taxes abated will not exceed $25 million.
Reach Matt Hawk at matt.hawk@tuscaloosanews.com or 205-722-0213.
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Here is update on the Hunt Tuscaloosa Refinery Coker Expansion showing IDA giving project +$50MM GO Zone Tax Free Bonds for $675 MM expansion which is expanding 3 major units including coker. The authority also amended Hunt’s 10-year sales tax & property tax abatements of 2006, in line with Hunt’s $175MM increased project cost.
This will be good news for Hunt since the project cost had escalated from original $500 MM ($200MM for coker) to $675MM – which is inline with most refinery & coker projects % cost increase globally. The expansion will nearly double products production from existing 52 MBD refinery & 15 MBD coking unit. This will mean adding a second 15 MBD unit with 2 new drums for the coking unit – bringing total coking capacity to 30 MBD by 2010.
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AnonymousWe are pleased to be a part of this project fabricating the coke drums, high pressure vessels and high pressure exchangers.
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AnonymousBe careful out there. Anyone who knows that place well, can tell you about the cover-ups and lies about equipment, not following API guidelines, and general working hazards!
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