According to the Curacao Chronicle, on 13th May Aruba’s Energy Ministry said it has signed a memorandum of understanding with the PDVSA’s US unit, Citgo Petroleum, to explore reopening and operating the island’s refinery, idled since 2012.
Initially owned by Valero Energy, the refinery was closed because of low profits. Since then, the 235 000 bpd facility has been used as a storage terminal by the US company and PDVSA, as the Venezuelan state oil company is known. Due to its close proximity to the Venezuelan coast, PDVSA and Aruba’s government have had talks since 2012 about a purchase or an operating agreement.
As reported by World Energy News, the agreement involves a 25 year lease, a 15 year operational lease and a 10 year extension option, that would allow Citgo to operate the refinery after investing in an overhaul that Aruba said could cost at least US$1 billion. The refinery could be up and running again within one and half to two years.
"The agreement is completely formalised," said Aruba's Energy Minister Mike de Mesa, adding that details would be announced ‘shortly’. Caracas-based PDVSA did not immediately respond to a request for comment.
Aruba would offer a good way for the PDVSA to produce heavy naphtha that it currently imports as diluent for its extra heavy oil output, and it would also produce refining feedstock for Citgo, sources told Reuters earlier this year.
Now only Aruba's parliament needs to approve the contract, a formality that should take up to two weeks. Re-opening the refinery would be a big boost for the small island's economy, helping to provide some of the 700 jobs that were lost previously.
Edited from various sources by Francesca Brindle
Read the article online at: https://www.hydrocarbonengineering.com/refining/16052016/aruba-energy-minister-confirms-citgo-to-reopen-refinery-3309/