Overview

The Petrojam Kingston Refinery upgrade/modernization project has been developed based on the results of a pre-feasibility study that was carried out on Petrojam’s behalf by Muse Stancil which investigated a number of possible plant upgrade options.  Based on an assessment of the various options studied it was decided to upgrade the refinery in two phases as outlined below.

 
PHASE 1

 Expand the refinery crude capacity from 35 kbbls/day to 50 kbbls/day to better meet local market demand and to achieve competitive economies of scale.

  • Installation of a new catalytic reforming unit with increased capacity (7,500 kbbls) capable of supplying the full gasoline demand of the Jamaican market.
  • Installation of a new vacuum tower (nominal capacity 30 kbbls/day).
  • Installation of a Visbreaker Unit (15kb/d) for the production of a lower cost heavy fuel oil product.
  • Installation of new desulphurization facilities to reduce the sulphur content in diesel oil from 5000ppm to around 15ppm.

The estimated cost for the Phase I program is US$ 200 million.

 
PHASE 2

  • Installation of a bottoms upgrading scheme to reduce the proportion of atmospheric bottoms in the overall refinery production slate using a delayed coker technology. Depending upon financing and capital considerations it may be decided to implement Phase 2 as a separate project. Export of vacuum gas oil will continue.

 
The estimated capital cost for the Phase 2 program is estimated at US$ 250-300 million depending upon the final conversion scheme chosen.

Why Upgrade?

The Refinery’s present production technology obliges Petrojam Ltd. to use more expensive, light crude oils and spiked crude oils (crude oils mixed with semi-refined distillate products) in order for the production mix to match the domestic demand pattern. Finished products are also imported to supplement deficit production or as refinery economics dictate.

The current refinery design is a hydroskimming configuration with a small catalytic reformer for producing high-octane gasoline blending components. Approximately 56% of the refinery’s production is heavy fuel oil with the remaining 44% being ‘clean’ products (LPG, Turbo, Gasoline and Diesel).

 This technical limitation restricts the long-term competitiveness of the refinery versus other competing refineries in the region, which produce a higher percentage of higher value ‘clean’ products.

 

Future Challenges

 Some future challenges that face the refinery include:

 The push for lower sulphur petroleum fuels (gasoline and diesel oil) in order to protect the environment and to be more compatible with new vehicle engine types;

  • A shift to diesel powered engines due to their higher efficiency and more acceptable environmental impact;
  • The planned introduction in the medium term (2009+) of new fuels types such as LNG or coal;
  • The planned phase-out of MTBE in gasoline;

 

The challenges facing the refinery can only be addressed with a strategic decision to upgrade its production facilities through the inclusion of a bottoms upgrading facility. At present the plan is to implement the PHASE 1 program only.

 Milestones

The projected schedule and principal milestones for the development of the Petrojam Refinery Upgrade project is as follows:

 

  • Execution of the Basic Engineering Phase = Feb 2000 – Jan 2007
  • Completion of Environmental Impact Assessment Study = Dec 2006
  • Development of Financing Plan /Arrangement of Debt & Equity Financing = Jan 2007
  • Construction Phase = First Quarter 2007 –  Second Quarter 2009
  • Plant Startup =  Mid Year 2009

 
 PDVSA Partnership

 The national Oil Company of Venezuela, under the Petrocaribe Agreement, has indicated a strong interest in participating in the proposed expansion/upgrade of the Petrojam Refinery. They have suggested that they would be willing to consider taking an equity position in the upgraded refinery and in providing Technical assistance to Petrojam in the Project Development effort.

 

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