NexLube suspended construction of its base oil rerefinery in Florida because costs exceeded its budget.
Our cost estimated now by our consulting engineers is higher than our expected budget, NexLube President Monte Bell told Lube Report yesterday. So we have suspended construction for what we estimate to be 90 to 120 days as we seek to raise additional capital.
Bell said NexLube estimates the project is now 60 percent completed. We have about 70 percent of our total cost under fixed price contracts, but the balance to complete the plant is more than what we expected, so were seeking additional funding.
He declined to go into detail at this time how the company will obtain the additional funding.
In June 2010, the Tampa Port Authority approved a 20-year lease option agreement with NexLube for the 12-acre, $75 million rerefinery and blending plant project, which is situated in the Port Sutton area of the Port of Tampa.
The facility is expected to process 24 million gallons of used oil annually and produce about 20 million gallons per year of API Group II base oil in three viscosity grades: 85, 150 and 330. The rerefinery is to use Revivoil technology, developed by Viscolube of Italy and Axens of France.
The blending plant will be designed to produce about 24 million gallons per year of finished lubricants, including motor oil, hydraulic fluid, transmission fluid and specialty products such as white oil.
In October, Bell told Lube Report the company was building the plant in two phases. The first phase includes a tank farm, utilities, office building and blending plant building. At that time, NexLube was working on the blending plant building and also moving on to the second phase, which included construction of the process unit itself.