The
engineering design for the US$200 million ($13 billion) modernisation
and expansion of the Petrojam oil refinery in Kingston began
last month, and should take about ten months to complete, government
officials say.
The engineering design will cost J$300 million.
Winston
Watson, managing director of Petrojam, confirmed in an interview
with the Business Observer yesterday, that the front-end engineering
design (FEED) study for the expansion project, which evolved
out of a memorandum signed in August last year between Jamaica's
prime minister P J Patterson and the Venezuelan president, Hugo
Chavez, would be finish by the end of 2006.
"The
(FEED) study started in February, and will take up to ten months,"
said Watson.
SNC Lavalin,
a large Canadian engineering firm with experience ranging from
chemical and petroleum projects to the production of military
equipment, was contracted in January 2006 to conduct the design
for a fee of US$4.67 million (J$300 million), according to the
Office of the Contractor General.
At the time
of the agreement between the two governments, Phillip Paulwell,
the technology and energy minister, had announced that the expansion
would lift the capacity of the 40-year-old refinery from 35,000
barrels to 50,000 barrels a day. Work will commence upon the
completion of the FEED study.
The expansion
and upgrade of the refinery would be carried forward by a joint
company established between PDVSA (the Venezuelan state oil
company) and Petrojam.
Watson also
pointed out that the refinery would enjoy improved efficiency
once the plant facilities were modified to accommodate increased
production of "clean products", simultaneously reducing
the proportion of capacity dedicated to heavier fuel oil.
"We
will get improved efficiency," Watson told the Business
Observer. "It (the expansion) will also allow us to make
more clean products - gasoline and diesel. We currently make
mostly fuel oil."
The Petrojam
modernisation is to be one of the projects under Chavez's PetroCaribe
energy initiative, in which Venezuela will provide cheap oil
to Caribbean countries. It also proposes, through multilateral
partnerships, to control the transportation and distribution
of the products in the region.
According
to Paulwell, the initial expansion apart, more work is projected
for the refinery under the initiative, at a cost ranging from
US$250 million to US$350 million. However the minister did not
say what was contemplated.
