Petrotrin will become uncompetitive and will go out of business in a few years if it does not undertake its massive upgrade programme now, said company executives.
Imtiaz Ali, general manager, strategy and business development, said the gas optimisation project (GOP), which was initially estimated to cost US$350 million in 2003, had escalated to US$1.3 billion due to an unanticipated expansion in the scope of works, increases in construction costs and delays due to financing and the availability of expertise and materials during construction. Ali said the global industry was moving in a certain direction towards efficiency and environmental protection, and Petrotrin had to upgrade its facilities to remain price competitive as well as meet the higher internationals standards that were being set by the industry and the major markets. Speaking at the Energy Conference hosted by the South Chamber in Port of Spain last week, Ali said the project would allow the company to lower its costs and expand its capability to use cheaper, lower quality crude, which can be sourced nearer to Trinidad. Apart from savings from transportation and raw materials, Ali said the new facility will be more efficient and will generate more of the higher value-added product that is being demanded by the international energy sector.
He said up to November 2009, the GOP had already cost $1.1 billion and was 89 per cent completed. Overall completion of the project is expected by November 2010, Ali added. "The scope of the project is firm, the schedule is realistic and the project is progressing within the newly projected cost structure. No additional cost overruns are expected. The project includes the upgrade or implementation of five key processes that will reduce the sulphur content of the end product, improve the octane levels of local and exported gasoline, as well as reduce impurities in diesel and aviation fuels. Ali also announced that the contract for the latest project to be undertaken by the petroleum refiner–the construction of a new ultra low sulphur diesel (ULSD) plant has been awarded to the Samsung Engineering Company Ltd. The cost of this new project is estimated at US$392 million and will be completed by March 2012. The ULSD unit will use a high pressure, catalytic, hydrotreating process that is designed to process 40,000 barrels per day of mixed gasoil feedstock and will meet the more stringent low sulphur diesel specifications to be competitive in international markets. He said the company will continue to develop its upstream business and will undertake extensive on-land 3D seismic acquisition surveys on approximately 215 square kilometres. The seismic survey will begin in the second quarter of this year at a cost of $170 million.
Land and marine exploration projects are also being planned with the drilling of 18 developmental on-land wells at a cost of $70 million, and two offshore developmental wells at the cost of $50 million. For local service providers, Ali said Petrotrin would award six new joint venture, production sharing contracts with commercial activities scheduled to begin by the second quarter of 2010. Also on the agenda is the upgrade of on-land infrastructure such as pipelines, access roads and bridges as well as tank farm facilities at a cost of $77.4 million. He said investments are also planned for upgrading Trinmar's offshore facilities.