Petrojam Limited, having gone through the environmental review for the refinery upgrade project, will now concentrate more fully on raising funds to expand the facility.

The environmental impact assessment - done by Claude Davis and Associates - on which a public hearing was held Thursday, analysed the impact on communities located within a two-kilometre zone of the refinery.

$2 billion of capital

Petrojam plans to pump just over $2 billion of capital into the project this year, and will go to the market. "Our financial advisers, Ernst &Young, will be going on the market to try and help us to find the financing for the project," Winston Watson, general manager of Petrojam, told Sunday Business.

"Even as we prepare the design package, which is the front-end engineering design, we will also have to get what is called an MPC from a person that does detailed engineering," he said.

"This is just the beginning of a process, which includes raising the money, and then we can get into the detailed engineering, as well as the construction phase. But the most important one is to raise the financing."

Watson is hoping that construction will get off the ground by early 2010, to be completed by 2011; however, the expanded facility is not expected to be in full operation until 2014.

capacity

The refinery, which was built in 1963, has a capacity to refine 36,000 barrels of crude oil a day, but according to project manager Andrea Reid, it is being outpaced by market demand because of its technology and age.

The planned expansion will increase daily oil production to 56,000 barrels.

The upgrade will make the plant more hardy, capable of processing heavier - which translates into cheaper - crudes.

Petrojam last year earned an estimated $119 billion in top-line revenue. But it also paid out $118 billion for crude and other production-related inputs.

It ended the year at March 2009 with a net loss of $3.8 billion, according to finance ministry figures, some $2.2 billion of which was foreign-exchange-related losses.

Finished products are imported to supplement deficits in production, or as refinery economics dictate.

The current refinery design is a hydroskimming configuration with a small catalytic reformer for producing a high-octane gasolene blend.

Approximately 56 per cent of the refinery's production is heavy fuel oil, with the remaining 44 per cent being 'clean' products - for example, LPG, turbo, gasolene and diesel fuels.

This technical limitation has restricted the long-term compe-titiveness of the refinery in the region, Petrojam says.

The modernisation programme has been developed based on the results of a pre-feasibility study by Muse Stancil, which investigated a number of possible plant-upgrade options.

The project will be done in two phases.

new unit

Phase one will see installation of a new catalytic reforming unit, with increased capacity (7,500 kilo barrels) capable of supplying the full gasolene demand of the Jamaican market; a new vacuum tower; a Visbreaker unit; and, new desulphurisation facilities to reduce the sulphur content in diesel oil from 5,000 parts per million (ppm) to around 15ppm.

The second part of the project will involve the installation of a 'bottoms upgrading scheme' to reduce the proportion of atmos-pheric bottoms in the overall refinery production slate, using delayed coker technology.

Permanent employment is expected to increase from 200 to over 400 under the project, including 35 engineers and 150 skilled technical staff.

The project plans to employ about 1,000 workers at construction.

mark.titus@gleanerjm.com