On Friday, a new agreement entered into by the Somerset-Pulaski County Economic Development Authority (SPEDA), the City of Somerset, Pulaski County Government and Houston-based Extiel GPG has created new momentum for a specialty chemicals plant project in Somerset.
The agreement improves the natural gas infrastructure for Extiel, which plans to build a $155 million facility that converts natural gas into high-performance, non-toxic and biodegradable lubricants, waxes and clean solvents in addition to low carbon hydrogen to be used in emerging hydrogen fuel cell applications. The plant, which will be built on 23 acres near Somerset Rail Park in Somerset just off the Highway 914 Bypass, is expected to be complete in late 2021 and will bring 20 new direct jobs to the community at an hourly rate at or above $20. Extiel will hire and train staff from the regional workforce.
SPEDA President and CEO Chris Girdler said the new framework was needed to give the project the opportunity to move forward. Though a public announcement about Extiel's facility was made two years ago, the existing agreement was not viable, Girdler said.
"To say the public announcement of Extiel's plans and interaction prior to today was premature would be an understatement," Girdler said. "While a previous framework was in place, quite frankly it was one in which our community could not support financially or otherwise. Unfortunately, it was one the city's existing natural gas infrastructure could not have supported either."
In the new agreement, the city, county and SPEDA agree to allow Extiel to design, build and own a new pipeline lateral outside of the city's distribution network that will connect to the city's main natural gas pipeline. Doing so will allow Extiel to safely consume approximately 5,000 decatherms of natural gas per day, something not covered by the previous agreement. The pipeline will be built to deliver an even higher volume for potential future growth, and Extiel will negotiate purchasing natural gas from the City of Somerset or third-party suppliers.
Months of natural gas capacity testing and meetings with industry experts determined the need for a higher-capacity pipeline to advance the project, Girdler said. With this agreement, Extiel representatives can now proceed to secure funding to carry out their construction plans.
The framework also outlines Extiel's 10-year lease of the 23-acre Crane Road property from SPEDA, plans to extend Thoroughbred Drive to access the property, and negotiation of a lease for property adjacent to where the facility will be built.
Somerset Mayor Alan Keck led the effort to evaluate and support the project, making a personal visit to Houston to negotiate with Extiel to ensure the project met both the community's and company's needs.
"The process of getting to this point has been challenging yet very rewarding for everyone involved," Girdler said. "Without the support of Pulaski County Fiscal Court and Somerset City Council, this project would not be possible. Mayor Keck led the effort on this project and represented our community with a bold but yet cautious approach and we all will be better served with this agreement due to his leadership."
Keck said it has been a privilege to work alongside SPEDA and Extiel GPG to bring this project closer to fruition.
"While a great deal of work remains, this agreement, one that is equitable on all fronts, realistic and viable gets us farther down the field," Keck said. "I look forward to diving in further in hopes that this project, with amazing potential, can come full circle and to full completion."
Pulaski County Judge Executive Steve Kelley said it is an exciting time for Somerset and Pulaski County as this project gets a step closer to reality.
"There have been countless hours invested by all parties to ensure the future success of this first-of-its-kind specialty chemicals facility in the U.S.," Kelley said. "This will be a boon to our local economy and will strengthen our position in the natural gas industry for decades to come. We stand ready to assist Extiel and its business partners as they seek prosperity in Pulaski County and our region."
Extiel GPG Director of Business Development Dwayne Phillips said he appreciates the community's diligence to make this agreement a reality.
"We, at Extiel GPG, are appreciative of the cooperation from the county, the city and SPEDA to work with us to negotiate the framework agreement over the past few months," Phillips said. "The finalization of the framework agreement is a critical first step in a series of other activities that are predicated on having this agreement in place."
Girdler complimented Extiel's leadership team.
"Dwayne Phillips and Greg Carr of Extiel have been gentlemen throughout the process and we have all enjoyed getting to know one another," Girdler said. "I commend their business savvy, industry specific knowledge, and their pursuit of historic milestones within an extremely competitive and tough energy sector."
More information about the project will be available in the coming weeks as further agreements and fundraising efforts are outlined, Girdler said.