Aruba delays refinery rehab amid US sanctions on Venezuela

Refineria di Aruba, a wholly owned incorporated company of the government of Aruba responsible for compliance monitoring of Citgo Petroleum’s Citgo Aruba Refinery, is putting a hold on the operator’s previously announced program to restart Valero Energy’s former 235,000-b/d refinery in San Nicolas as a result of US sanctions recently placed on Citgo’s parent company Petroleos de Venezuela SA.

Content Dam Ogj Online Articles 2019 02 190219 Rda Aruba Final

Refineria di Aruba NV (RdA), a wholly owned incorporated company of the government of Aruba responsible for compliance monitoring of Citgo Petroleum Corp.’s Citgo Aruba Refinery NV, is putting a hold on the operator’s previously announced program to restart Valero Energy Corp.’s former 235,000-b/d refinery in San Nicolas, Aruba, as a result of US sanctions recently placed on Citgo’s parent company Petroleos de Venezuela SA (PDVSA) (OGJ Online, Jan. 29, 2019).

Work on the second phase of the refinery’s proposed rehabilitation will be delayed beginning Feb. 27, RdA said in a post to its official Facebook account. The delay follows the US Office of Foreign Assets Control’s determination that the project benefits PDVSA, RdA said

Despite the setback, RdA said Citgo Aruba as well as the government of Aruba continue to do whatever is necessary to avoid permanently halting the project.

Start of work on the refinery rehab kicked off in October 2016 following a June 2016 agreement between the parties under which Citgo Aruba committed an investment of $715 million to transform the refinery into a plant designed exclusively to upgrade Venezuelan extra-heavy crude oil production as part of PDVSA’s program to increase production from Orinoco belt (OGJ Online, Oct. 11, 2016).

Following the proposed 18-24-month overhaul and revamp of existing processing units at the site, the refinery will have a capacity to upgrade 209,000 b/d of extra-heavy crude from Orinoco heavy oil belt into intermediate crude feedstock that will be shipped to Citgo’s US refineries for further processing.

Once completed, the refurbished plant will not be a traditional refinery in the downstream but technically will be considered a crude upgrader in the upstream sector, according to RdA’s web site.

Citgo Aruba will operate the San Nicolas complex—which is now owned by the Aruban government—under a 15-year lease agreement with a 10-year extension option.

Restart of the San Nicolas complex will be accompanied by construction of a 17-mile gas pipeline from Venezuela to Aruba that will deliver excess natural gas from Paraguana for use at the San Nicolas upgrader to help reduce operational costs as well as refinery emissions, according to RdA’s 2018-21 strategic business plan.

Contact Robert Brelsford at rbrelsford@ogjonline.com.

More in Operations