Petrobras Starts Construction of Abreau e Lima Refinery Without PDVSA

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Researched by Industrial Info Resources (Sugar Land, Texas)--Brazil’s state-owned energy company Petrobras (NYSE:PBR) began construction of the Pernambuco refinery in the Suape industrial complex in Ipojuca on September 4, 2007, without the planned participation of the Venezuelan state-owned oil company PDVSA.

The new plant is one of Petrobras’ strategic plan projects included in the Brazilian Growth Acceleration Plan (GAP), which the federal government launched January 23, 2007. The Abreau e Lima refinery, for which the total investment is estimated to be $4 billion ($2.24 billion through 2010), has the capacity to process 200,000 bpd of heavy oil. Its products will be aimed at the demand in the northeastern part of the country. (IndustrialInfo.com January 26, 2007 – Petrobras Plans 183 Projects Worth $ 69 Billion)

According to Petrobras representatives, the company has signed a contract for earthwork, draining and paving for the Pernambuco refinery with Brazilian engineering companies Odebrecht Galvao Engenharia, Queiroz Galvao and Camargo Correa. (IndustrialInfo.com August 9, 2007 – Petrobras and PDVSA Received Preliminary License for Abreau e Lima Oil Refinery in Brazil)

Even though the Brazilian and Venezuelan presidents announced their partnership in the construction of the Pernambuco refinery on December 2005, PDVSA, which was supposed to hold 40% stake in the new refinery, and Petrobras, which was to hold the remaining 60%, did not reach a final agreement. The plant’s construction, which marks the return of the downstream industry’s expansion in the country, began September 4, 2007, with the presence of Brazilian President Luiz Inacio Lula da Silva, Pernambuco Governor Eduardo Campos, Petrobras Chief Executive Jose Sergio Gabrielli de Azevedo and Downstream Director Paulo Roberto Costa, among other company representatives. The refinery, which will be the first to process 100% heavy oil, is expected to produce some 814,000 cubic meters of petrochemical naphtha, 322,000 tons of LPG, 8.8 million tons of diesel fuel and 1.4 million tons of oil coke per year. The refining of heavy crude will help Brazil reduce its need to import light oil to produce quality fuels. The new refinery's main production focus is on diesel fuel, particularly aimed at supplying the increased demand for derivatives in the Northeast. Moreover, the Abreu e Lima refinery will be capable of producing low-sulfur content derivatives and will comply with the strict European standards. Petrobras authorities plan to start producing diesel fuel with 50 ppm of sulfur in 2010.

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