Petroplex acquires land in St. James

Published 12:00 am Wednesday, May 25, 2011



VACHERIE – Petroplex International recently closed on its purchase of more than 1,700 acres of land along River Road in Vacherie for construction of a 10 million-barrel petroleum storage facility, representatives for the company said Monday.

Larry Sciacchetano, a managing partner for the firm, said Petroplex paid about $19 million for the site, which was owned by Crescent Homeplace Plantation. He said the firm had been eyeing the property for its 63-tank crude oil, petroleum and biodiesel storage facility since 2008.

Sciacchetano said there is still huge demand for crude storage in the area from the refineries along the Mississippi River. He said crude oil and other products are presently being stored aboard tankers at twice the cost of dry land storage.

Although the firm says it is permitted for 10 million barrels of storage, Sciacchetano said the project will begin as a 4 million barrel facility, and when that portion is complete, a 6 million barrel expansion will immediately follow. He said the first phase will take about 2 years to complete.

The total cost of the project, which could take as much as seven years to complete, is roughly $700 million.

Sciacchetano said he could not disclose the details of the financing for the project, although some private investors are involved. Petroplex had gotten help financing the property purchase through a U.S. Department of Agriculture program designed to support economic development in lower-income areas, he said.

The land sale depended on Petroplex acquiring permits, including a much-disputed air quality permit that was needed before construction could begin. The state Department of Environmental Quality issued a “synthetic minor source” permit to Petroplex in 2009, but opponents argued the facility would emit more than 100 tons of volatile organic compounds, such as benzene, into the air and would require a more stringent “major source” permit.

The DEQ decision was challenged and has been upheld by the 19th Judicial District Court and the Louisiana 1st Circuit Court of Appeal. The 1st Circuit decision was rendered in late March.

The Louisiana Environmental Action Network, as well as a local environmental watchdog group known as Community Strength, has asked the U.S. Environmental Protection Agency to block the project’s construction. The agency has yet to issue a decision on that request.

Sciacchetano said Petroplex has obtained all the necessary permits needed to begin construction, with the exception of a water discharge permit, which isn’t needed during the construction phase. Opponents, however, say the facility has only secured the air permit and has not acquired other necessary permits from other agencies.

Vacherie attorney Michael Calabro, a member of Community Strength, said Petroplex still needs to obtain a coastal use permit from the state Department of Natural Resources for a proposed docking area along the river. He said the firm also must also receive permission from the U.S. Army Corps of Engineers before the facility can be built.

“If they had all the necessary permits, the government agencies involved would have posted the information for the public,” Calabro said. “We have seen nothing from the corps and nothing from DNR. If they have the permits, prove it.”

Community Strength has been a strong opponent of the project since its inception in 2007. The group claims the firm has not taken into account the affect the facility will have on surrounding residential areas, including a nearby school.

Calabro said Petroplex is “taking a gamble” in buying the land since there are still questions about whether the permits will be secured. He said Community Strength is still considering bringing the case before the Louisiana Supreme Court.

Sciacchetano said the project would bring about 500 jobs to the area at peak construction and would also create anywhere from 70 to 100 permanent jobs. He said Verwater BV, based in Rotterdam, Netherlands, is the general contractor for construction of the facility. He said the firm is in the process of performing soil tests that will help determine the foundation needed to support the storage tanks.

Sciacchetano said that Petroplex has taken into account the concerns from residents. He said the property being used for the storage facility is roughly a mile from the first residence in the area and the facility would include a double tree line buffer on both sides of the property. He also said the firm would work to beautify the front of the property that faces River Road.

“We have committed to being a good neighbor from day one, and we will continue to be just that,” he said.

In addition to storage, the site also has more than 3,000 feet of river frontage, with a 45-foot draft that will allow large vessels and river barges access to a docking system.

Sciacchetano added the facility would have the capabilities for loading or discharging via truck rack and railcar, as well as connectivity to waterways and pipelines.