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Jamaica aims for oil refining compromise
published: Wednesday | August 17, 2005
Adrian Brown, Gleaner Writer
( left - right ) WRIGHT and CHAVEZ
A MASSIVE upgrading of the inefficient old Petrojam oil refinery is planned, which would almost double its capacity from the present level.
With crude oil supplied by Venezuela under the Petrocaribe agreement, this country could by 2008 begin exporting modest amounts of refined petroleum products. A separate agreement has been signed with Venezuela, under which their petroleum company could participate in financing the development of Petrojam.
"We are doing the engineering designs now and if all goes according to plan, we should have the upgraded refinery operating towards the end of 2008," said Noel daCosta, Chairman of Petrojam. The current technology used at the refinery means that half of each barrel of petroleum that is refined is converted into fuel oil, which sells for less than half the price of gasoline or diesel oil.
If the refinery was modernised, substantially more of the petroleum could be converted to high value products, Mr. daCosta said. He was speaking at a Rotary Club luncheon held at the Jamaica Pegasus hotel in Kingston recently.
Jamaica now consumes 41,000 barrels of petroleum products each day, but Petrojam only refines 28,000 barrels per day. The balance which is imported consists mainly of LPG, gas oil and gasoline.
When the project is complete, Jamaica would become self-sufficient in products such as gasoline and diesel. An added bonus is that the fuel would have a lower sulphur content, making it less polluting. The proposal is for the plant to have a production capacity of 50,000 barrels per day.
That is the catch. We, along with most of our CARICOM partners, now import our requirements mostly from Trinidad, so that country stands to lose major markets in the way the Petrocaribe agreement is now structured, markets that would be flooded with Venezuelan oil.
BIGGEST PETROTRIN CUSTOMER
Jamaica is the biggest customer in the region for Petrotrin, Trinidad's national oil company, the Trinidad Guardian reported last week . The paper said that if Petrocaribe is implemented in its present form, Petrotrin will have to look at new markets which could lead to new specifications and significantly jeopardise the company's viability.
The paper quoted Dr. Raymond Wright, group managing director of the Petroleum Corporation of Jamaica, the Petrojam parent company, as saying that Jamaica proposed that the crude from Venezuela be refined at the Petrotrin facility in Pointe-a-Pierre and then distributed to the rest of the region.
Dr. Wright, told Wednesday Business that the refinery upgrade would enable the plant to process Venezuelan crude oil, but the grade of oil that country produces is also found in several other countries. Thus Jamaica is not locked into processing oil only from that market.
BETTER COMMERCIAL TIES
"The Petrocaribe initiative is expected to deepen commercial ties between the countries of the region and Venezuela," Mr. daCosta said. There are, "no other strings attached."
But one concern might be just whether the South American oil giant has the capacity to fulfil all the many regional commitments it is taking on. Isaac Yanovich, president of Colombia's state oil company Ecopetrol said last week that a US$130 million natural gas pipeline deal with their neighbour had stalled, despite a signed agreement.
Although it is earning enormous revenues from soaring oil prices, analysts say heavy spending on social programmes by Venezuela's president Hugo Chavez is draining money away from the development of his country's energy sector.
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published: Wednesday | August 17, 2005
Adrian Brown, Gleaner Writer
( left - right ) WRIGHT and CHAVEZ
A MASSIVE upgrading of the inefficient old Petrojam oil refinery is planned, which would almost double its capacity from the present level.
With crude oil supplied by Venezuela under the Petrocaribe agreement, this country could by 2008 begin exporting modest amounts of refined petroleum products. A separate agreement has been signed with Venezuela, under which their petroleum company could participate in financing the development of Petrojam.
"We are doing the engineering designs now and if all goes according to plan, we should have the upgraded refinery operating towards the end of 2008," said Noel daCosta, Chairman of Petrojam. The current technology used at the refinery means that half of each barrel of petroleum that is refined is converted into fuel oil, which sells for less than half the price of gasoline or diesel oil.
If the refinery was modernised, substantially more of the petroleum could be converted to high value products, Mr. daCosta said. He was speaking at a Rotary Club luncheon held at the Jamaica Pegasus hotel in Kingston recently.
Jamaica now consumes 41,000 barrels of petroleum products each day, but Petrojam only refines 28,000 barrels per day. The balance which is imported consists mainly of LPG, gas oil and gasoline.
When the project is complete, Jamaica would become self-sufficient in products such as gasoline and diesel. An added bonus is that the fuel would have a lower sulphur content, making it less polluting. The proposal is for the plant to have a production capacity of 50,000 barrels per day.
That is the catch. We, along with most of our CARICOM partners, now import our requirements mostly from Trinidad, so that country stands to lose major markets in the way the Petrocaribe agreement is now structured, markets that would be flooded with Venezuelan oil.
BIGGEST PETROTRIN CUSTOMER
Jamaica is the biggest customer in the region for Petrotrin, Trinidad's national oil company, the Trinidad Guardian reported last week . The paper said that if Petrocaribe is implemented in its present form, Petrotrin will have to look at new markets which could lead to new specifications and significantly jeopardise the company's viability.
The paper quoted Dr. Raymond Wright, group managing director of the Petroleum Corporation of Jamaica, the Petrojam parent company, as saying that Jamaica proposed that the crude from Venezuela be refined at the Petrotrin facility in Pointe-a-Pierre and then distributed to the rest of the region.
Dr. Wright, told Wednesday Business that the refinery upgrade would enable the plant to process Venezuelan crude oil, but the grade of oil that country produces is also found in several other countries. Thus Jamaica is not locked into processing oil only from that market.
BETTER COMMERCIAL TIES
"The Petrocaribe initiative is expected to deepen commercial ties between the countries of the region and Venezuela," Mr. daCosta said. There are, "no other strings attached."
But one concern might be just whether the South American oil giant has the capacity to fulfil all the many regional commitments it is taking on. Isaac Yanovich, president of Colombia's state oil company Ecopetrol said last week that a US$130 million natural gas pipeline deal with their neighbour had stalled, despite a signed agreement.
Although it is earning enormous revenues from soaring oil prices, analysts say heavy spending on social programmes by Venezuela's president Hugo Chavez is draining money away from the development of his country's energy sector.
More Business
E-mail this story