Mon | Mar 25, 2019

Petrojam to spend US$37m to diversify operations

Published:Friday | February 15, 2019 | 12:16 AM
Newly appointed Minister of Science, Energy and Technology Fayval Williams speaks to journalists after yesterday’s ceremonial opening of Parliament at Gordon House.
Newly appointed Minister of Science, Energy and Technology Fayval Williams speaks to journalists after yesterday’s ceremonial opening of Parliament at Gordon House.

The Andrew Holness administration intends to spend US$20 million to facilitate the commencement of construction of a vacuum distillation unit (VDU) at the state-owned oil refinery Petrojam in the 2019-2020 financial year.

This was revealed in the 2019-2020 Jamaica Public Bodies estimates of revenue and expenditure tabled in the House of Representatives yesterday.

The VDU will enable the oil refinery to go into asphalt production and would mark the first phase in the upgrading of the facility.

A total of US$10.4 million will also be spent for major maintenance works on the refinery and the replacement of its storage tanks.

These works will be carried out to contribute to Petrojam’s sustainability and improved efficiency.

In December last year, the Government indicated its intention to return a US$100-million tranche that was secured from the Ministry of Finance and the Public Service to develop the VDU.

The loan was accessed through Petrojam’s parent company, the Petroleum Corporation of Jamaica.

In the meantime, Petrojam is projecting capital expenditure of US$37.99 million over the next fiscal year to improve and maintain refinery capabilities, achieve cost efficiencies, as well as increase marketability.

The oil refinery anticipates a net profit of US$15.55 million for the next fiscal year, down from the estimated US$22.31 million for 2018-19, which ends next month.

nickoy.wilson@gleanerjm.com