Cuba hit by wave of blackouts

A wave of blackouts has blanketed Cuba this week amid a shortage of fuel supply from its close ally Venezuela.

Most of the island's main power plants are off line, forcing the government to ration electricity, but the stations will be restored by the end of this week, energy minister Raul Garcia said on 16 July.

President Miguel Diaz-Canel, who replaced Raul Castro last year, said on 14 July that "despite a deficit in the import of fuel, electricity generation has been supported and, as our people have been informed, work is being done to ensure (supply) during the summer."

The breakdowns at Cuba's power stations have cut off just under 800MW, forcing state-owned utility UNE to divert supply to essential services such as hospitals, Garcia said.

The island´s installed generating capacity totals 5,870MW, of which 3,200MW is operational, according to UNE. The utility has not responded to questions about generation prior to this week's power cuts.

Most of Cuba's power plants date from the Soviet era. Some burn locally produced sour crude while others use imported oil, mostly from Venezuela.

The problems have affected Cienfuegos, Santiago de Cuba and Mariel, but Havana has been largely spared, Garcia said.

While blackouts are common in Cuba, the outages have worsened over the past three years because of a drop in subsidized fuel from Venezuela, which is in the throes of a severe economic and political crisis.

"There has been a deficit with the import of fuel, which has forced us to establish measures of internal restriction for its consumption, avoiding as far as possible the effects on the population and the main sectors and services of the economy," Diaz-Canel said on the weekend.

"Savings and control have become more important, so we have to put every liter where it is most needed."

Despite Garcia's assurances, Cubans are aware that the island is suffering from a severe fuel deficit, a Caribbean diplomat in Havana told Argus.

"The shortage is evident in the rationing of products such as gasoline and LPG," the envoy said. "There have always been power cuts but nothing as extensive as this week's outages."

The government tightened controls over fuel supply in June to cope with the shortage aggravated by US sanctions on Venezuela, its state-owned oil company PdV and freight companies that facilitate Venezuelan oil supply to Cuba, which Washington blames for propping up Venezuelan president Nicolas Maduro.

The sanctions expanded Cuba's oil deficit to about 35,000 b/d in June, up from 25,000 b/d in January, Cuban government officials have told Argus.

Cuba is trying to shore up its troubled power sector with a Turkish 126MW floating power plant that was stationed in the port of Mariel in early June.

Cuba's power deficit would be ameliorated by a proposed LNG-to-power project led by France's Total. Germany's Siemens is believed to be partnered in the LNG project that would utilize a floating storage and regasification unit on Cuba's northern coast west of Havana to supply three 200MW plants at the East Havana power complex.

None of the companies has indicated when the LNG project would start construction or when it would be commissioned.

Russia's state-owned Inter Rao is retrofitting and expanding the Máximo Gómez complex under a 2016 agreement with UNE. The agreement includes a fourth 200MW dual fuel station.

Russia is providing a $1.36bn loan for the $1.6bn development of the plants. Commissioning was scheduled to begin in 2022, but is now expected to be completed in 2023.