Jamaican refinery due $1-billion overhaul

The governments of Venezuela and Jamaica have finalized an agreement to undertake the long-planned expansion and modernization of their Petrojam Ltd. joint venture’s 36,000-b/d hydroskimming refinery in Kingston, Jamaica.

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The governments of Venezuela and Jamaica have finalized an agreement to undertake the long-planned expansion and modernization of their Petrojam Ltd. joint venture’s 36,000-b/d hydroskimming refinery in Kingston, Jamaica (OGJ Online, Apr. 28, 2006).

Formally executed in mid-February, the agreement calls for the joint funding and execution of the Petrojam Refinery Upgrade Project (PRUP), which will expand the hydroskimming plant into a full-conversion, 50,000-b/d refinery, the governments of Venezuela and Jamaica said.

Alongside adding 14,000 b/d of crude processing capacity, PRUP also will include unit capacities for vacuum distillation, delayed coking, and diesel desulfurization, according to Jamaica’s Ministry of Science Energy & Technology (MSET).

As part of the agreement, the post-expansion Petrojam refinery—which currently imports the bulk of crude feedstock from Venezuela and Mexico—will increase its reception and processing of Venezuelan heavy crude blend Merey 16 (16° API gravity) from the Orinoco belt, Venezuela’s Ministry of Petroleum (MOP) said.

With a formal deal for PRUP now in place, the countries plan to form a taskforce in the next month that will be responsible for finalizing contractual arrangements with general contractor Sinohydro Corp. Ltd. of China, which alongside providing engineering, procurement, and construction for PRUP, also will undertake financing of the project, MSET said.

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Previously estimated at an overall cost $758 million in 2008, PRUP will now require a capital investment of about $1 billion to complete, MSET said.

PRUP follows a series of agreements between Jamaica and Venezuela under the PetroCaribe trade initiative established by the late Venezuelan President Hugo Chávez in 2005 to assist Caribbean islands in meeting their energy requirements at reduced costs amid high oil prices (OGJ Online, July 18, 2005).

Petrojam is a subsidiary of state-owned Petroleum Corp. of Jamaica 51% and Venezuela’s state-run Petroleos de Venezuela SA (PDVSA) 49%.

Overview

Part of Jamaica’s plan to ensure long-term competitiveness and viability of the refinery—the island’s only—PRUP was delayed in 2010 amid financial constraints facing both the Jamaican and Venezuelan governments, according to MSET’s latest annual report.

Resuscitated in 2014, the modernization project will upgrade the refinery to meet five major objectives, which include increasing production of finished products to meet both local and export demand; improving unit processing efficiencies; improving production quality to meet more stringent environmental standards; diversifying the slate of finished-product output; and broadening flexibility to efficiently and profitably process a wider variety of crudes, Jamaican Prime Minister Andrew Michael Holness said in his budget presentation for 2016-17.

As most recently outlined by Petrojam in 2008, PRUP was to include upgrades to the refinery’s existing crude distillation, gas recovery, and kerosine hydrotreating units, as well as the addition new unit capacities for the following:

• Vacuum distillation.

• Distillate hydrotreating.

• Naphtha hydrotreating.

• Continuous catalyst regeneration platforming.

• Delayed coking.

• Sour water stripping.

• Amine absorbing.

• Sulfur recovery.

• Tail gas treating.

Petrojam also plans to install a wastewater treatment plant as part of the project, MSET said.

Contact Robert Brelsford at rbrelsford@ogjonline.com.

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