Commissioners freely threw support toward Chemtex International’s pursuit of a state grant for railway improvements Monday, one that would address safety and transportation needs for what could soon be “Sampson County’s largest taxpayer.”
Chemtex International Inc. is seeking a $95,000 grant from the DOT to assist with the costs of constructing rail spur lines off the Clinton Terminal Railroad to their proposed plant at Clinton Industrial Rail Park off N.C. 24 East (Turkey Highway). Chemtex plans to present the grant application to the N.C. Department of Transportation in March and requested the resolution of support locally as part of its efforts.
It is another cog in the wheel of preparation for a biomass supply company that would bring $200 million in project investment and create 68 direct jobs at the Clinton-based plant. With the investment and jobs involved, economic development director John Swope said the rail spur construction project would qualify for the N.C. DOT Rail Industrial Access Fund’s maximum grant award of $95,000.
Officials with Chemtex were in town most of the day Monday meeting with local government officials and city and county personnel.
“As you can imagine, as you delve into a major project like this, there are a lot of details,” said Swope. “One of the critical matters with the site development is the rail spur line going into the site. The preliminary engineering has been completed. It will include one spur line coming off Clinton Terminal Railroad, but it will expand to two lines to help them manage the incoming empty rail cars and the outgoing full rail cars.”
With seven outbound shipment rail cars anticipated per day, that will mean roughly 2,500 rail cars in a year’s time.
The estimated cost of the rail spur construction project is estimated at $3.16 million. According to the project application, there is another $1.78 million expected from the N.C. Department of Commerce and in excess of $1 million in funding still to be determined.
While Chemtex plans to formally present its grant package to the DOT board at its meeting in early March, the application must be submitted at least a month prior, or by Wednesday. Swope said the deadline was tight, but requested commissioners support as part of that package in an effort to make the project more attractive.
“They are seeking grants to help pay for that cost,” said Swope. “Sampson County has no obligation, no financial obligation, but the N.C. DOT does require support from Sampson County to form a resolution. There is no local match required.”
A groundbreaking venture in this country, Chemtex International Inc. will provide feedstock based on high-yielding energy crops and residuals. All biomass will be grown by local farmers, with a yearly supply estimated at 300,000 tons.
Chemtex is currently involved in a comprehensive permitting process for the biofuels refinery production plant, slated to open at the start of 2015. In addition to the 68 direct jobs at the plant, there is another 280 indirect jobs expected to be created.
The proposed rail spur into the Chemtex facility will require the construction of 5,567 feet of track, an open turnout on the Clinton Railroad right of way and another four turnouts on the spur to accommodate switching, delivery and pickup operations by the Clinton Railroad.
On site, there will be a heavy duty grade crossing of a single track, to allow for the truck entrance, as well a turnout, allowing for a second parallel (or runaround) track for the locomotive delivering railcars to drop the empty cars on one track then continue to retrieve the loaded cars and exit the facility.
Adjacent to the building, where railcar loading operations will take place, there will again be parallel tracks. Each of those tracks will be dedicated to loading a specific material. On the track where ethanol will be loaded, the rail will need to be insulated, bonded and grounded to reduce risk of an ignition source and a containment system will be required to prevent ethanol runoff into the environment.
The proposed turnout location, adjacent to N.C. 24, will require approval from the Clinton Railroad, as it will be on their right of way. In addition to the turnout, an additional 73 feet of track will be on the railroad’s right of way before the spur crosses onto Chemtex-owned property, where all the other rail construction will be located. The rail spur, including the rails into the site, will be owned by the county.
Commissioner Albert Kirby asked whether it was a done deal that Chemtex would be in Sampson. Swope said everything, including permitting, design plans and the extensive proposal for the rail system, pointed to that being the case.
“This is their preferred site,” said Swope. “Everything they’re working toward is toward developing on this site. They are committing monies to this.”
Within the month of February, Chemtex officials will be doing soil tests and other analysis and testing that will see more funds expended. The company has already spent around $1.5 million on the project as it relates to the Turkey Highway site, he noted.
“It’s not a commitment from Chemtex, but they anticipate that if everything goes the way it should, they would have the financial closing on this project — their USDA loan guarantee completed and go to the financial markets to borrow funds for the project — in the third quarter of this year, 2013,” said Swope. “If things continue to go as planned, you might see construction starting in that fourth quarter, maybe October.”
Part of that plan would be receiving support from local government. Swope said county and city officials have already been working closely with Chemtex representatives. A resolution of support for the rail project would be another step in a positive direction, he said.
County commissioners were more than happy to offer that support.
“So they are asking us if we want to do a resolution? I would write back, ‘are you kidding me — of course,’” said Commissioner Albert Kirby. “How many jobs are they bringing in here?”
“They want to make sure everybody’s on board,” said Swope. “They want to make sure if they fund a program we aren’t in a spat with somebody, we are not fighting with Chemtex and that everyone is on the same page.”
Other commissioners agreed with Kirby. Commissioner Jefferson Strickland asked that that all five commissioners be able to make the motion, for the first time on record. “We’re all that happy about it.”
The vote was unanimous.
“If it means that they’re coming here, we’ll all walk (the resolution) over there and give it to them,” Kirby said.
Swope said he was pleased with the commissioners’ reaction and excited about the prospect of Chemtex’s imminent arrival.
“Last year was pretty regular work with Chemtex, but this year it’s even more, which is the exciting thing,” said Swope. “They’re busy and they’re keeping us busy. They met (Monday) with several department heads and were pleased with the response. It’s going to be a great working relationship. With a project like this there are going to be hurdles, but we have a great team and Chemtex is a great group. It’s all doable.”
Chris Berendt can be reached at 910-592-8137 ext. 121 or via email at email@example.com.