Petrobras cleared to boost refinery output

OREANDA-NEWS. January 13, 2016. Brazil's state-controlled Petrobras has received an emissions waiver from the Pernambuco state government that allows the firm to boost crude processing at the Abreu e Lima refinery from a current 74,000 b/d to 100,000 b/d.

The refinery has a design capacity of 115,000 b/d.

The 64pc cap on processing was put in place in December 2014 pending the completion of an emissions treatment unit, known as SNOX. Today the state government said Petrobras must use a low-sulfur blend until the emissions treatment unit is finished.

In December 2014, Petrobras terminated the original SNOX contract with a consortium comprised of Brazilian firms MPE and Alumini for non-compliance. Both companies have been linked to a kickback scheme that cost Petrobras billions of dollars.

Last week, Petrobras said it had earmarked R756mn (\\$188mn) for projects at Abreu e Lima this year, mainly for the SNOX unit. The company plans to re-launch the tender for the unit, now 70pc complete, in the first half of this year.

Located in the northeastern state of Pernambuco, the Abreu e Lima refinery has been at the center of a massive investigation into systemic corruption at Petrobras. Originally expected to cost less than \\$5bn, the refinery price tag has swelled to more than \\$18bn.

A second 115,000 b/d train originally scheduled to come on stream in May 2015 has been pushed back to 2019. Around 70pc of the refinery's yield is diesel.