Petrojam said to be reviewing two Chinese bids
State-owned oil refinery Petrojam Limited is now analysing proposals received for the upgrade of the petroleum refinery, and will submit their findings to the company's board, Energy Minister Philip Paulwell said Monday.
Paulwell said there was a financing component to the bids, but energy officials were unwilling to speak to the structure under which that would occur.
Wednesday Business has otherwise learned that Petrojam is reviewing at least two bids, both from Chinese sources. Its evaluation is expected to be ready for board review in about two weeks.
Paulwell's disclosure of the bids came amid follow-up questions from Wednesday Business on the minister's comments a week ago that the oil refinery had to show progress on the expansion programme this year, otherwise, it was likely that the entity may have to be shut down.
The expansion programme, which has lagged for years, is meant to increase refining capacity from 35,000 barrels per day to 50,000 barrels, position the facility to handle heavier and, therefore, cheaper crudes, and increase its range of products.
The refinery currently supplies about 80 per cent of the local non-bauxite market and 70 per cent of the national market.
Petrojam has been pursuing expansion plans for a decade. In 2005, the Government of Jamaica decided to pursue the upgrade by way of a joint venture, and followed up with the sale of 49 per cent shareholding to PDVCaribe, a subsidiary of Petroleos de Venezuela SA. Jamaica retained a controlling 51 per cent, but later attempted to divest control to PDVSA, without success.
According to an environmental report submitted to the planning authority about six years ago, an engineering study completed in 2008 had determined that the project would require capital of US$758 million, funds that Jamaica lacked.
On Monday, Minister Paulwell said he would not be able to speak to a timetable for the upgrade and expansion until Petrojam completes its evaluation and make a recommendation to the board.
"The proposals that are in would also have the financing component. We have to wait to see the evaluation because it's a complete package that was tendered for," he said.
Petrojam's new general manager, Howard Mollisson, declined to comment on time lines for the project, saying through the refinery's communications unit that the status of negotiations did not allow for any disclosures at this time.