Published:Friday | September 4, 2015 Daraine Luton
Jamaica will be seeking to push Venezuela to begin the upgrade of the Petrojam refinery in order for it be ready when the Jamaica Public Service Company (JPS) cuts its demand for heavy fuel oil in 2017, and turn to gas to run its new power plants.
Energy Minister Phillip Paulwell said yesterday that both countries will discuss the refinery upgrade at the 10th Anniversary Commemorative Summit of the PetroCaribe Agreement at the Montego Bay Convention Centre in St James this weekend.
Heavy fuel oil, produced by Petrojam, is the main source of electricity generation in Jamaica. Paulwell said yesterday that it was important that when the JPS switches to gas, “we are in a position to provide more gasolene and other products apart from HFO”.
Jamaica, in 2006, signed an agreement with Venezuela for a 49 per cent stake in Petrojam. As part of the agreement, production should have moved from an average of 30,000 to 50,000 barrels of petroleum products per day starting in 2007, but this output has not yet been realised. And with the South American country in an economic rut, there are fears that the upgrade will be stalled.
“We will be taking a position in relation to the refinery upgrade,” Paulwell told The Gleaner, adding, “We are having those discussions, which we hope to conclude as one of the achievements of this summit.
“We have to push now,” Paulwell said, while adding that if Venezuela was unable to finance the project. “There are private people who have expressed strong interest in it.
“We have done all the technical work. It is now for the go-ahead for us to move,” the minister added.
Meanwhile, Prime Minister Portia Simpson Miller and Venezuela President Nicolás Maduro will co-chair the commemorative summit on Saturday.
Several heads of government and state, energy ministers and other ministers of government will participate in the summit. In addition, high-level representatives from the Caribbean Community, the Food and Agriculture Organisation of the United Nations, and the Latin American Energy Organisation are expected to attend.
Paulwell said yesterday that despite suggestions of the end being near for PetroCaribe, the summit will be used, among other things, to deepen the relationship between member nations.
The PetroCaribe agreement was signed in Montego Bay in 2005. It gave 18 Caribbean nations access to subsidised petroleum loans. Venezuela promised to finance up to 50 per cent of the cost of the oil over a 25-year period.
However, facing financial hardship, Venezuela sold the debt of Jamaica and the Dominican Republic, which led to the country getting a 50 per cent discount on oil debts. In Jamaica’s case, the country bought back its US$3 billion in long-term PetroCaribe debt for roughly half the value.
published by The Gleaner.
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