The Jamaican government says it will establish a “firm” schedule to implement the upgrading and expansion of the Petrojam refinery, as it seeks to make the operations more modern and efficient.
Science, Technology, Energy and Mining Minister Phillip Paulwell, said the issue will be discussed at the 8th PetroCaribe Summit, scheduled for June 29, in Nicaragua.
“We have been talking too long about the upgrade of this refinery, it has been producing for us for close to 40 years. We are now on a firmer path, especially since the new president of Venezuela has assumed office, to pursue some of the things that were not done, over the last five years, including the expansion and upgrade of the Petrojam refinery,” he said.
Paulwell said the government is hoping to move this process a step closer to fruition, with the Venezuelan government having already committed, as part of the economic zone of PetroCaribe, a relationship which will see value added, along with efficiency.
In May, during the PetroCaribe ministerial meeting in Venezuela member states agreed on an economic zone to boost regional development and Paulwell said that Jamaica will eventually produce its own ultra-low sulphur diesel, as this will be synchronised with upgrading of the refinery.
“We are importing this fuel, and it’s not our intention that this will be a long-lasting activity. The day will soon come when we will be producing this fuel in Jamaica.”
2006 agreement
In 2006 Jamaica signed an agreement with Venezuela for a 49 per cent stake in Petrojam, and as part of the agreement, production should have moved from an average of 30,000 to 50,000 barrels of petroleum products daily, starting in 2007, but this output has not yet been realised.
“We are now back on track. We have to update some of the financials, and the first thing the Board has agreed to do, with the support of Venezuela, is to get that front-end engineering design project updated, so that we have figures that are more realistic than the2007/2008 figures,” Paulwell said.
Paulwell said that many of the features of the expansion project are now more positive than they were in 2007, to justify the expansion and upgrading of the refinery.
“It will enable us to produce those things that we use in Jamaica – LPG, gasolene, and low sulphur diesel – so that we will be almost self-sufficient, and be able to export some of it,” he said, pointing out that the by-product, petcoke, will enable the generation of 100 megawatts of cheap electricity.
“What we will be doing this weekend in Nicaragua is to establish the firm schedule towards its implementation and funding,” the minister said.
Upgrading of the refinery will ensure its viability in the long-term and allow for the installation of treatment facilities to meet new environmental specifications for diesel oil, and gasolene.
Additionally, Paulwell said discussions will be held at the Summit on the trade compensation mechanism aspect of the PetroCaribe Agreement, which allows Jamaica to trade goods and services, as part of the process of repaying PetroCaribe loans.
“We have a very significant development, which we hope will be crystallised this week, in Nicaragua,” he said.
Under PetroCaribe, Jamaica and other Caribbean countries benefit from preferential rates on crude oil, refined products, and LPG or its energy equivalent, from Venezuela.
The payment arrangement allows for purchase of oil on market value for 40 per cent up-front, within 90 days. The remainder of the payment can be made over a period of 25 years with one per cent interest, provided that oil prices are above US$40 per barrel.
– CMC
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