When Petrotrin shuts down its refinery, it will be re-established under a new name - the Trinidad Petroleum Holding Ltd - with four subsidiaries.
The announcement was made yesterday by Energy Minister Franklin Khan, as he delivered his contribution on the Appropriation (Finance Year-2019) in Parliament.
Khan spoke proudly about the new plans Government will roll out in the coming days for the State-owned company, which has racked up a billion dollar debt, faces cash flow problems and systemic issues which he described as a “perfect storm” that led to Government shutting down the refinery’s operation in August.
However, Khan said Petrotrin will be restructured under a new holding company.
“Corporation sole is the owner of the company. We will be forming a holding company with four subsidiaries. We have already found a name for the holding company Trinidad Petroleum Holding Ltd,” Khan said.
The first subsidiary will involve the old Petrotrin which will deal with legacy items; the second will focus on exploration and production; the third will handle terminalling and marketing, which will be tasked with the responsibility for importing refined products and selling it to the local market and the fourth subsidiary is where the refinery assets will be placed.
Khan said there was a difference between shutting down and decommissioning.
“We are just closing down the operations. We are deinventerising the assets, which is taking out all the saleable products…safeing the plant largely with liquid nitrogen so it could be mothballed for possibly a short while and when a new business model emerges, based on conversations we will have with the market, then the refinery can be re-operationalised.”
Khan said he expects revenue and cash to be “generated, hopefully by the E&P arm of the company and marketing should be sufficient based on the models we have on to service the debts of Petrotrin.”
He said no longer will Petrotrin be faced with an albatross over its neck called a refinery.
As to when the refinery will wind down, Khan gave the date as October 15 to 31st.
“The first import shipment of products will be on October 17, 2018. The first crude export will be October 27 because we have to ship 500,000 barrels, so it takes about ten to 12 days to accumulate that volume.”
Throughout this transition, Khan said one area of concern they are paying particular attention to was health, safety and the environment
He said Government has a robust plan to ensure there is a seamless continuity of supply of fuels to the local market, which the national community has raised concerns about.
When the refinery’s operations come to a halt, Khan said there would be a 20-day supply of fuel for the local market.
“Our first shipment of imported products will come in on October 17 …that will supplement. And as we phase out the local supply there would be a continuous flow of imported products.”
Another concern was Liquefied Petroleum Gas (LPG) (cooking gas), Khan said.
He said the local demand for LPG was 2,500 barrels a day, while local production is 14,700 barrels.
“With the closure of Petrotrin, local supply will come from Phoenix Park Gas Processors Ltd and Atlantic LNG.”
There will be importation of LPG, Khan insisted, saying there will be a smooth transition with the price of LPG remaining the same for consumers.
As for bitumen, which is used in road construction and paving, Khan said Government would have no choice but to import it through Lake Asphalt.
“However, consideration will also be given to opening up the market so contractors can import bitumen at their own risk and their own cost if they so desire. So it would be a fairly liberalised market.”