Thyssen plans world-class grassroots refinery in Brazil

THYSSEN INTERNATIONAL, part of German group Thyssen Krupp AG, plans to invest about $2 billion to build a world-class grassroots refinery in northern Brazil. Thyssen International Chairman Hans Ulrich Gruber disclosed that, after about 8 months of negotiations with the government of Cear state in northern Brazil, the company has formally requested permission from Brazil's National Petroleum Agency (ANP) to proceed with the project. Sources at ANP said that the request will most likely be

Sept. 14, 1998

2 min read

THYSSEN INTERNATIONAL, part of German group Thyssen Krupp AG, plans to invest about $2 billion to build a world-class grassroots refinery in northern Brazil.

Thyssen International Chairman Hans Ulrich Gruber disclosed that, after about 8 months of negotiations with the government of Cear state in northern Brazil, the company has formally requested permission from Brazil's National Petroleum Agency (ANP) to proceed with the project. Sources at ANP said that the request will most likely be approved.

Project details

The new refinery will be located in the industrial district of Pecem, where a new port is being built. Pecem is 50 km from Fortaleza, Cear 's capital.

Gruber said the refinery will be built in two stages: the first, to begin in 2000, will be concluded in 2003, requiring total investments of $840 million. The second stage will be concluded in 2008, with investments totaling $910 million. These figures do not include the costs for designing and implementing the project, said Gruber.

The plant's initial distillation capacity will be 110,000 b/d, to be expanded to 200,000 b/d. In the first stage, the refinery will process light crude oil imported from western Africa, particularly Nigeria and Angola.

In the second stage, Gruber said, the refinery will process lower-gravity crudes, from Brazil. All the output of gasoline (regular and premium grades), jet fuel, LPG, diesel, and fuel oil will be marketed in Brazil's northern and northeastern states.

Thyssen Rheinstahl Techinik, in partnership with Interoil, Rio de Janeiro, will be responsible for construction. Gruber said that the project is open for investment by other Brazilian or foreign partners. He also said that negotiations have begun for securing a financial consultant to implement project financing for the refinery.

The refinery, to be called Renor, will be only the third privately-owned refinery in Brazil; private firms own small refineries at Ipiranga, Rio Grande do Sul state, and at Manguinhos, Rio de Janeiro state. State oil company Petroleo Brasileiro SA owns Brazil's remaining 10 refineries and 1 asphalt plant.

This is the first major grassroots downstream project with private investment in Brazil to be launched after the passage last year of constitutional amendments opening up Brazil's petroleum industry to foreign investors, ending Petrobras's 43-year upstream and downstream monopoly.