New low-sulfur diesel debuts in Brazil

Dec. 16, 1996
Brazilian state petroleum company Petroleo Brasileiro SA (Petrobras) has begun deliveries to wholesalers of a new low-sulfur diesel that is designed to improve air quality and vehicle performance in five major Brazilian cities. Eventually, the new low-sulfur diesel will be available throughout Brazil's major metropolitan areas, the culmination of a $1 billion refining upgrade program. Meanwhile, Petrobras has signed a $150 million financing agreement with Japanese company Nissho Iwai

Brazilian state petroleum company Petroleo Brasileiro SA (Petrobras) has begun deliveries to wholesalers of a new low-sulfur diesel that is designed to improve air quality and vehicle performance in five major Brazilian cities.

Eventually, the new low-sulfur diesel will be available throughout Brazil's major metropolitan areas, the culmination of a $1 billion refining upgrade program.

Meanwhile, Petrobras has signed a $150 million financing agreement with Japanese company Nissho Iwai covering a revamp of its Capuava refinery.

New diesel

With a maximum sulfur level of 0.3 wt %, the new diesel is being produced by Petrobras refineries at Cubatao, Capuava, and Sao Jose dos Campos in Sao Paulo state; and Mataripe in the northern state of Bahia.

The cities of Sao Paulo, Santos, Cubatao, Salvador, and Aracaju currently are receiving low-sulfur (0.5 wt %) diesel, and will be the first cities to benefit from the lower-sulfur diesel.

The low-sulfur diesel program results from an accord in 1992 among Petrobras; Brazil's Institute of Environment and Renewable Resources (Ibama); the automobile industry; and the National Fuels Department (DNC), a division of the Mines and Energy Ministry.

Use of the new low-sulfur diesel will cut sulfur emissions in Sao Paulo state alone by about 900 tons/month.

Petrobras has invested about $1 billion in sulfur-reduction facilities at the five refineries and continues negotiating with environmental organizations, industry, and the government, to further reduce sulfur levels.

Petrobras officials say that as of October 1997, the cities of Fortaleza, Recife, Rio de Janeiro, Curitiba, Porto Alegre, Belo Horizonte, Belem, Campinas, and Sao Jose dos Campos will also be receiving 0.3 wt % diesel.

By January 1998, all other Brazilian cities will receive diesel with a maximum level of 0.5 wt % sulfur, compared with the present 1 wt %.

Revamp financing

On Nov. 28, Petrobras foreign arm Braspetro Oil Services Co. (Brasoil) signed the financing deal with Nissho Iwai mainly for upgrading work at the Capuava refinery, located in the municipality of Maua, metropolitan Sao Paulo.

Most of the funds will be earmarked for installation of a new fluid catalytic cracker at Capuava.

Some of the money will be invested in smaller, undisclosed projects at other Petrobras refineries.

The contracted financing is for a period of 7 years at floating interest rates based on Libor (London inter-bank offer rate) and will be amortized in 20 quarterly installments with a 2-year grace period, added Petrobras officials.

The Capuava refinery's existing cat cracker has operated since 1954 and will be replaced by another with more efficient technology.

The new FCC unit will increase capacity to 20,700 b/d from 12,420 b/d.

The projects also include measures for upgrading the refinery's energy efficiency and substantially reducing refining costs, in addition to contributing to a reduction of air pollution in metropolitan Sao Paulo.

The new unit is expected to come on stream in 1999.

Copyright 1996 Oil & Gas Journal. All Rights Reserved.