Issues request for expressions of interest on the international market

By Durrant Pate/Contributor

After many years of delay and back-and-forth, the Government of Jamaica is finally pushing ahead with plans to upgrade Jamaica’s sole state oil refiner, Petrojam.

To this extent, Petrojam has issued on the international market a request for expressions of interest to upgrade the terminal at the company’s 35,000 barrels per day (b/d) plant in Kingston at Marcus Garvey Drive. The call is for consultants to advance the engineering, procurement and construction of the terminal.

Proposals are due by November 5 this year. The move comes in light of the fact that Petrojam’s suboptimal operations at its terminals have contributed to oil losses.

US$22.54 million upgrade 

Petrojam plans to spend US$22.54 million to upgrade/renovate/construct inter alia, storage tanks (including a new asphalt tank), pipelines and electrical infrastructure as well as other capital maintenance activities.

The refinery processes crude sourced primarily from Brazil, Ecuador and Colombia into finished products, including liquefied petroleum gas, auto diesel oil, turbo fuel, heavy fuel oil, asphalt, and unleaded gasoline.

In its estimates of revenue and expenditure for public bodies for the year ending March 2025, the Ministry of Finance stated, “Petrojam will continue to undertake major maintenance/refurbishment at the refinery toward improving operating efficiencies.”

The planned upgrade of the refinery has suffered from several delays stemming from international pressure and sanctions on its then-joint partner in Venezuela’s state-run refinery,  Petroleos de Venezuela SA (PDVSA), which had owned 49%, and the scandal which rocked the company in 2019.

Zacca Report

This led to the establishment of a Petrojam Review Committee in September 2018 led by Sagicor Group President Christopher Zacca. The committee’s remit was to examine several other issues that remain concerning what the strategic direction the refinery should take in the future.  

The Zacca report proposed ending Petrojam’s refining operation and instead recommended that the facility be run as a terminal for imported refined petroleum products. 

The plant was too small and the cost of upgrading too expensive for Petrojam to operate efficiently and profitably as an oil refinery, the Zacca report concluded.