Trinidad takes lead in Caribbean refinery offer

Trinidad and Tobago plans to name an operator for its 160,000 b/d refinery by the end of August, a process that will be closely watched by other Caribbean nations that are offering downstream opportunities of their own.

The government received 77 expressions of interest to operate the money-losing Pointe-a-Pierre facility that was closed in November 2018, and is currently considering 25.

"Binding offers will be in by the third week of August and that will be the end of the search process," prime minister Keith Rowley said, declining to specify any of the potential operators.

The refinery will be either sold or leased to "an international operator because there is no indigenous capacity to run a refinery of that size and complexity," energy minister Franklin Khan said.

While in operation, the refinery supplied domestic and neighboring island markets with gasoline, kerosene, aviation fuel, diesel, fuel oil and LPG.

The refinery was not viable as it relied on increasing volumes of imported crude, the government said in August 2018 when it announced its intention to close the century-old plant.

One factor that would be determined by a new refinery operator is access to feedstock, the energy ministry said.

Trinidad produced 64,895 b/d of crude in 2018, according to energy ministry data.

Trinidad last imported crude for the refinery in October 2018 at 15,409 b/d, 77pc less than September. Imports were mainly Russian Urals, Gabon's Oguendjo, Brazil's Lula and Roncador, and Colombia's Vasconia.

Domestic crude is now exported by new state entity Heritage Petroleum.

The government will also tie its importer Paria Fuel Trading to the operations of the refinery as it will be "reduced to being just a tank farm when the refinery restarts production," Khan said.

Paria Fuel Trading was created when the government closed the refinery, and has been importing around 25,000 b/d of products to meet domestic demand.

Khan had said last year that Paria Fuel Trading would not be sold because it is "a strategic state asset" that plays a critical role in ensuring fuel supply.

Khan's assertion that no local entities would be capable of operating the refinery was rejected by the refinery labor union OWTU that opposed the plant's closure. OWTU has said it has potential partners with which it could operate the facility, and described Khan's statement as "very troubling," OWTU said.

The union incorporated a company – Patriotic Energy – that is participating in the bidding process. OWTU accused Khan of violating a non-disclosure agreement about the process.

Downstream offers in the neighborhood

Trinidad is one of several Caribbean countries that are looking for new investors or operators for their aging refineries. Port of Spain has the advantage of domestic oil and gas supply, even though both are declining.

In the Dutch Caribbean island of Curacao, the government is awaiting non-binding proposals for its 335,000 b/d Isla refinery by 15 July. The plant is currently leased by Venezuela's struggling national oil company PdV. The firm's lease expires in December.

And in Jamaica, the government recently took over PdV's minority stake in the 35,000 b/d Petrojam refinery in anticipation of a likely shutdown and conversion into a fuel terminal.

The Dominican Republic has also indicated interest in finding a new investor for its 34,000 b/d Refidomsa refinery in which PdV retains a minority stake.