Eric Watkins
Oil Diplomacy Editor
LOS ANGELES, Jan. 22 -- Brazil's Petroleo Brasileiro SA (Petrobras) is considering plans to proceed unilaterally with building a new refinery in Pernambuco state in Brazil if Venezuela's Petroleos de Venezuela SA (PDVSA) does not agree soon on a price for supplying Venezuelan crude.
"We have already concluded the shareholders accord and the (company) statute, but not the supply contract," said Petrobras executive Paulo Roberto Costa. "If we delay in concluding the contract, the project will not stop, since Petrobras has enough heavy crude [to supply the refinery on its own]."
Last September, Petrobras began work on the 200,000 b/d Abreu e Lima refinery, under a plan that called for a 60-40 partnership, with the Brazilian firm as the facility's majority shareholder.
Under the agreement, each state oil company would supply half of the required crude oil to the refinery: 50% from Brazil's Marlim Sul field in the Campos basin and 50% from Venezuela's Carabobo 1.
However, PDVSA wants to supply its share of the crude at above-market prices, while Petrobras wants the supply contract tied to the prices of benchmark crudes such as Brent or West Texas Intermediate.
Despite the lack of agreement with PDVSA, Petrobras has been moving forward with the refinery and its supporting infrastructure.
Last week, Brazil's hydrocarbons regulator Agencia Nacional do Petroleo (ANP) authorized Petrobras to build a 9 km pipeline linking the proposed refinery to Suape port in Pernambuco state.
Construction on the pipeline, which also would link the refinery to the Transpetro terminal and distributors based in the harbor complex, is due to begin in the first half of 2009 and complete in 2 years.
In mid-December, Petrobras opened offers for four operating systems for the refinery, including a coking unit, an atmospheric distillation unit, a hydrotreater, and services for interconnection among the various units.
Earlier, in August 2008, Petrobras and the Pernambuco state government signed an investment contract for 475 million reais ($288 million) to develop Suape port and industrial complex, according to a report in financial newspaper Valor Economico.
The paper said Petrobras would provide the state with some 310 million reais to carry out improvements to the port structure, while the remaining 165 million reais would be invested by the company in its own preparations for the refinery.
Once completed in 2010, the Abreu e Lima refinery will produce 814,000 cu m/year of naphtha, 322,000 tonnes/year of LPG, 8.8 million tpy of diesel fuel, and 1.4 million tpy of petroleum coke.
Contact Eric Watkins at [email protected].
