Eric Watkins
Senior Correspondent
LOS ANGELES, July 23 -- Venezuela's President Hugo Chavez and his Nicaraguan counterpart Daniel Ortega July 20 launched construction of a 150,000 b/d refinery in Piedras Blancas, near Nicaragua's Pacific coast and about 90 km west of its capital, Managua.
Because the refinery will produce five times more product than Nicaragua uses, Chavez said the arrangement will transform the Central American nation into a net exporter after startup in 4-5 years. Plans call for exports to other Central American countries, to the western coast of North America, and possibly to Asia.
Chavez said that total investment in the project could reach $4 billion and that the entire amount will be financed by a joint venture called Alba de Nicaragua SA (Albanisa) that was founded earlier this week. Albanisa is comprised of Petroleos de Venezuela SA (PDVSA) subsidiary PDV Caribe 55% and the Nicaraguan state oil company Petronic 45%.
"This time this work will not be financed by capital from the International Monetary Fund," said Chavez, who will be able to keep a close rein on the new firm through family connections. Albanisa is headed by Asdrubal Chavez, a cousin of the Venezuelan leader and president of PDVSA. Petronic Pres. Francisco Lopez will serve as the new firm's vice-president.
The immediate investment aim of the Sandino-Bolivar refinery—named in memory of the national heroes of Nicaragua and Venezuela, respectively—will be to increase storage capacity to 27,000 bbl from the current 14,000 bbl. Further plans call for the eventual construction of a petrochemical complex.
Last year, PDVSA said it planned to build a pipeline through Nicaragua to transport oil from the Caribbean to the Pacific, bypassing the Panama Canal (OGJ Online, Dec. 19, 2006).
Contact Eric Watkins at [email protected].
