Trinidad considers offers for shut oil refinery

Market: Crude oil, Oil products
24/06/24

Trinidad and Tobago is again seeking an operator for the mothballed state-owned 165,000 b/d Guaracara refinery, and will decide by the end of August on several offers for the facility, prime minister Keith Rowley said on Sunday.

The government has received eight expressions of interest from domestic and foreign companies to purchase or lease the refinery at Pointe-a-Pierre on the southwest coast that was closed six years ago, government officials told Argus.

Rowley did not name the potential operators. But Indian steel producer Jindal Steel and Power "is interested in the potential of the refinery," Rowley's office said last week after he met in Port of Spain with the company's chairman Naveen Jindal.

Trinidad shut the refinery in 2018 after a steady decline in crude production forced increases in imported feedstock, sending up refining costs that the government said were "unsustainable."

A new owner would likely face similar challenges in obtaining feedstock as the country's crude production has moved from 144,400 b/d in 2005 to average 49,880 b/d in January-March of this year.

A restart of the refinery "will be feasible only if there are arrangements for access to competitively priced imported crude that will allow profitable operating margins," a government official told Argus today.

The government is making "very good progress" in efforts to offload the refinery, energy minister Stuart Young said on 21 June.

But the company that would take over the plant "would have to be able to address several issues including asset management and the financial capability to operate the refinery," Young said.

The government has failed since 2018 to reach an agreement with domestic and foreign interests for reopening the refinery.

It renewed efforts to offload the facility following the late 2020 collapse of a sale agreement with area labour union-owned company PET that made a $700mn offer, outbidding US private equity firm Beowulf Energy and German refiner and trader Klesch.

The government and California-based electrical contractor Quanten failed to reach an agreement in December 2022 for the takeover of the refinery.

Growing oil producer Guyana rejected a proposal from Trinidad in February that it should supply crude to allow the Guaracara plant to be reopened.

By Canute James

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