Cayman’s current fuel storage terminal in George Town is dangerous and no longer adequate for its purposes, Planning Minister Kurt Tibbetts told the Legislative Assembly last week.
Mr. Tibbetts, responding to a parliamentary question from North Side MLA Ezzard Miller, said the fuel delivery pipelines at the Jackson Point terminal just south of the George Town waterfront are now “reaching the end of their useful life.”
The fuel pipelines deliver diesel and airplane fuel to Owen Roberts International Airport and to the Caribbean Utilities Company.
Given “enormous development” on Grand Cayman, Mr. Tibbetts said the fuel storage terminal on South Church Street is now in a congested area of residential and commercial properties and is in the direct flight path of Owen Roberts Airport.
“The government is aware of the growth restriction at the fuel terminal site which has a direct effect on the premium price we pay for fuel,” Mr. Tibbetts said. “It is inevitable that we expand our fuel capacity to meet the islands’ demand and, to do so, we must make plans to move the terminal from Jackson Point to a less developed location on these islands.”
Mr. Miller had asked whether Navasota energy, a south Texas-based oil consultant firm, had been employed by the Cayman Islands government.
Mr. Tibbetts said Navasota is still in discussions with the government about the relocation of the Jackson Point fuel terminal, but that the government “has not paid Navasota and will not pay Navasota” for its services.
If an arrangement is reached, Navasota would find a partner for the government that would be interested in financing and building a new bulk storage facility on Grand Cayman.
“My understanding is that Navasota gets compensated through commission earned from the oil companies for introducing clients/partners for projects,” Mr. Tibbetts said. “I am told that in the energy industry this practice often occurs.”
The Cayman Compass obtained a joint development agreement signed between the government and Navasota that seeks to eventually shutter Cayman’s current bulk fuel storage facility and build a new one in East End, according to government records obtained under the Freedom of Information Law.
In his response to the parliamentary question, Mr. Tibbetts did not specify a location for the new fuel terminal.
“The oil companies need a storage hub to hold fuel in a location that is close to their buyers, along with the ability to allow timely transhipment of product to buyers,” Mr. Tibbetts said.
The three-page memorandum, signed in April, states that Cayman and Navasota Clean Energy LLC intend to “establish a fully integrated development plan and structure such that they might attract one or more [fuel] terminal companies” that are interested in fuel supply and transshipment operations.
According to the agreement, the goals for the new storage facility include: Establishing a long-term fuel supply plan, providing revenue to government, creating jobs, reducing the “fuel factor” costs on CUC bills and “building infrastructure to support the current cruise ship initiative.”
Under the agreement, the government undertakes to: “Work with Navasota on potential sites on the East End of Grand Cayman and provide preferred rights of way for [a] delivery pipeline from East End to [the] current pipeline system.”
The government would also create an “enterprise/duty free zone” for the operation of the fuel terminal and formulate an economic development package to include certain unidentified incentives.
In return, Navasota agreed to work with Cayman on evaluating potential fuel terminal sites in East End, screen potential candidates to operate the oil terminal, and conduct a bidding process that would involve both Navasota and the government reviewing the proposals. Navasota also agreed to support a “cruise ship design terminal initiative” including specs on refueling.
Proposals for a “home port” refueling and harboring facility for cruise ships and large yachts in East End was discussed under the previous United Democratic Party government, but the idea was abandoned following public protests staged by opponents of the project.