PetroEcuador negotiating with six crude suppliers
OREANDA-NEWS. December 21, 2015. State-owned PetroEcuador completed a \\$1.2bn upgrade of its 110,000 b/d Esmeraldas refinery, and is now looking to overhaul two smaller refineries as it negotiates with crude suppliers.
The 38-year-old Esmeraldas complex operated at half capacity during most of the turnaround, and was closed completely on 1 October-9 November 2014.
The upgrade that started in July 2014 was carried out by South Korea's SK, the UK's KBC, Australia's Worley Parsons and US firm UOP.
The revamped refinery features a new 20,000 b/d fluidized catalytic unit, 2,000 b/d larger than its predecessor, allowing the refinery to increase its high octane gasoline yield by 1,800 b/d to 12,000 b/d, and LPG production by 850 b/d to 5,700 b/d.
PetroEcuador is exploring financing options to upgrade the 45,000 b/d La Libertad refinery and the 20,000 b/d Shushufindi (Amazonas) refinery, PetroEcuador chief executive Alex Bravo told Argus.
La Libertad, built 60 years ago, will be upgraded to produce 5,000 b/d of asphalt. PetroEcuador plans to install a 10,000 b/d vacuum tower at the plant, according to Bravo.
La Libertad now produces diesel, low-octane gasoline, fuel oil and some jet fuel.
The firm also aims to increase LPG production at Shushufindi to 500 t/d from a current 200 t/d by installing a compression system to recover LPG from flared gas, Bravo says. Shushufindi now produces mostly LPG and jet A-1.
In addition to upgrading its refineries, PetroEcuador plans to import 28°API sweet crude to process at Esmeraldas in order to optimize its product yield.
PetroEcuador has said it is seeking to purchase 30mn bl of medium crude for one year, but the strategy could be extended for several years until oil prices recover, according to a company official.
Proposals must include financing alternatives covering 100pc of the purchase cost, highlighting the wider economic struggles facing Quito in the wake of the oil price collapse since 2014.
Of 40 supply offers, PetroEcuador is negotiating with six companies and hopes to sign a contract soon, Bravo says.
The firm could increase its annual refining income at Esmeraldas by \\$26mn for every extra degree of quality. "If we increase the API of the crude input to the refinery by four points, then PetroEcuador could obtain an additional \\$104mn," Bravo says.
The restart of Esmeraldas will reduce fuel imports next year. The finance ministry forecasts imports of oil products of close to 129,590 b/d, down from the 154,852 b/d imported in January-September 2015, according to PetroEcuador figures, and from a 165,753 b/d initial projection for 2015.
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