Continuing its search for project financing, Probex Corp. has switched to a cheaper option for engineering and construction of its first used motor oil processing plant in Wellsville, Ohio.
The Dallas company announced that it has signed an agreement with Tyler, Texas-based Petrofac and is negotiating to dissolve a previous engineering, procurement and construction alliance with Bechtel Corp. Probex officials said they will continue to work with Bechtel in some areas but that the new contract will save money and bolster the drive for project financing.
Since we began our efforts to obtain financing, it became appropriate for us to consider other options, Vice President of Investor Relations Les Van Dyke said. This is a major step in allowing financing to go forward.
Probex wants to become a world leader in the collection and processing of used motor oil, using its patented ProTerra technology. It has been delayed, however, by its search for project financing. Officials have said previously that the plant would cost approximately $100 million. Van Dyke declined to say how much the Petrofac contract will save. The savings stem at least in part from the fact that the new contract calls for a modular construction.
Probex said it still plans to use Bechtels front-end engineering and design work, as well as its finishing technology. In addition, Bechtel affiliate United Infrastructure Co. remains an investor in Probex. Probex and Bechtel never actually entered an EPC contract, despite lengthy negotiations.
A lot of it revolved around various guarantees and assurances, Van Dyke said. In todays society, everybody wants their end of the deal to be as risk-free as possible.