Cuba to triple oil refining
Campaign News | Tuesday, 28 October 2008
Revolutionary allies Cuba and Venezuela will pour billions of dollars into downstream oil projects in Cuba with the goal of tripling its refining capacity to 350,000 barrels per day (bpd) by 2013, Cuban state-run radio said on Tuesday, citing the country’s Basic Industry Minister.
Minister Yadira Garcia’s announcement came despite falling oil prices which are expected to slow Venezuela’s plans to build around a dozen refineries in the region.
But oil-rich Venezuela is expected to prioritize Cuban investments in Cuba, which currently has the capacity to refine 130,000 bpd, local experts said.
Garcia said the two countries planned to build a new refinery in central Matanzas province in addition to expanding a joint venture refinery in central Cienfuegos province and doubling the capacity of a refinery in eastern Santiago de Cuba.
The Cienfuegos refinery, opened a year ago, is producing 65,000 bpd, with plans to eventually produce 150,000 bpd and feed a series of joint venture petrochemical industries at a coast of $3.6 billion.
Investment in the refinery expansion in Eastern Cuba, begun earlier this year with the goal of reaching 50,000 bpd, was recently put at $850 million by Venezuela.
Garcia’s announcement of plans to build a refinery in Matanzas was the first made in Cuba, though it was previously announced in Venezuela with a capacity of 150,000 bpd and price tag of $4.3 billion.
Cuba consumes a minimum 150,000 bpd of petroleum products, of which up to 92,000 bpd comes from Venezuela. The rest is pumped from the northwest coast along with natural gas for power generation.
Under President Hugo Chavez, Venezuela has become a close ally of Cuba which is an enthusiastic supporter of Chavez’s regional integration proposal, the Bolivarian Alternative for the Americas, aimed at countering U.S. influence in the region.
As part of bilateral integration efforts, Venezuela is revitalizing Cuba’s downstream operations and plans to use the island as a bridge to supply the Caribbean with crude and derivatives with preferential financing.
The increased refining capacity would also be in place to process increased Cuban production if drilling in its Gulf of Mexico waters, scheduled to begin next year, proves fruitful.
In addition to the Cienfuegos refinery, the two countries have formed joint ventures to operate a Soviet-built supertanker port on the northern coast, a cross-country pipeline from the port to the refinery, and a joint tanker company to move petroleum products in the Caribbean.