Petrotrin to start up long-delayed ULSD plant early next year

Trinidad and Tobago’s state-owned Petrotrin LLC has said its ultralow-sulfur diesel (ULSD) plant will begin production in second-quarter 2015.

Petrotrin Pres. Khalid Hassanali said the plant’s startup has been delayed because of disagreements between Petrotrin and lead contractor Samsung Engineering, but that he felt the issue could reach resolution.

“I intend to meet with Samsung and I feel confident that we will be able to reach an agreement so that we can quickly complete the project,” Hasannali told OGJ.

The project is now almost 2 years behind schedule, millions of dollars in the red, and has been hurting Petrotrin’s refining and marketing operations.

Petrotrin has blamed the shale revolution in the US and lower crude prices at Cushing, Okla., for its decision to significantly reduce its refinery throughput to 120,000 bo/d from 180,000 bo/d (OGJ Online, July 16, 2014).

Refineries in both Aruba and the US Virgin Islands have been shuttered as Caribbean refineries are facing higher prices for crude on the international market than many US refineries, which are benefiting from the continued bottleneck at Cushing.

Mado Bachan, Petrotrin vice-president of refining and marketing, said there are significant challenges now facing the company’s R&M business. He explained that Petrotrin has imported 60% of the crude needed for refinery feedstock, while 40% of the crude has come from domestic production.

Bachan explained that with global spare refinery capacity averaging nearly 20 million bbl of refined products in 2014, it puts a cap on margins.

He said, “It’s your gross margins that affect your profitability, because it is from your gross margins that you have to find money for your operating costs including utilities, inputs, labor, and so on.”

Bachan said the closure of refineries in the Caribbean was not necessarily a global trend because there continues to be construction of modern, highly efficient refineries. As an example, he pointed to Saudi Arabia, which is adding refining capacity as it seeks to refine even more of its own crude.

The company said its ULSD unit is being constructed as part of Petrotrin’s Clean Fuels Program and in its continuing effort to improve the profitability of the Pointe-a-Pierre refinery to meet the challenges of tightening product specifications.

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