Cuban power plants to burn more local crude

Cuba is rehabilitating a fifth of its installed power-generating capacity to burn domestic heavy crude, energy and mines minister Livan Arronte said in a government statement.

The retrofitting of three power stations, a process that has aggravated blackouts in recent weeks, is designed to replace "more expensive diesel and fuel oil" with a local resource, Arronte said.

The plants to be converted by year's end include 260MW Felton in Holguin province, 100MW Mariel east of Havana and 95MW Santiago de Cuba.

Some of Cuba's Soviet-era power plants already burn domestic crude, but those fired by imported diesel have been affected by a feedstock shortage caused by US sanctions on political ally Venezuela and on shipping companies that have transported oil to the island.

Venezuela's state-owned PdV continues to supply some oil to Cuba, but an acute fuel shortage inside Venezuela has left little to share with Havana. Some production of Venezuelan crude, in contrast, has been shut in because PdV cannot find enough buyers willing to face down the risk of US sanctions. It is unclear if PdV is shipping some of its surplus heavy crude to Cuba.

Cuba has 5.87GW of installed generating capacity, of which 3.2GW is operational, according to state-owned utility UNE. Peak generation has averaged 2.2GW over the past five years. Solar, wind and hydro plants currently generate only 7pc of demand.

State-owned oil company Cupet has not answered a request for information on current oil production.

In December 2019, economy minister Alejandro Gil cited the government's 2020 crude output forecast of just over 56,000 b/d. Cuba planned to limit crude and refined products consumption in 2020 to 149,900 b/d, Gil said. National demand is 160,000 b/d, according to official figures that include feedstock for Cupet's 65,000 b/d Cienfuegos refinery. Arronte confirmed that the refinery is operating, without specifying at what level.

Hydrocarbons production is currently running at 103pc of the official plan, guaranteeing 51pc of the fuel used for electricity generation, Arronte said in the 8 August statement.

The government's decision to retrofit the power plants comes amid delays in planned Russian-sponsored upgrades. A 2016 agreement between UNE and Russia's state-owned Inter Rao to convert 800MW of capacity to gas has not yet started.

Commissioning of the upgraded plants was scheduled to begin in 2022 but was rescheduled in June 2019 to be completed in 2023.