Sascha Wil­son

Petrotrin pres­i­dent Khalid Has­sanali has de­nied that the com­pa­ny's shut­down of the cat­alyt­ic crack­ing unit (cat crack­er) for up­grad­ing over the past few months had cost $2 bil­lion. How­ev­er, Has­sanali re­vealed the cost of the project jumped from US$156 mil­lion to a whop­ping US$439 mil­lion and has had a four-year de­lay, large­ly be­cause of the pro­cure­ment process that was used in award­ing the con­tract.

Speak­ing with re­porters at the En­er­gy Cham­ber's lun­cheon at Para Suites Ho­tel, La Ro­maine yes­ter­day, Has­sanali said he was sur­prised by Op­po­si­tion?Sen­a­tor Ter­rence Deyals­ingh's claim in the Sen­ate on Tues­day that the cat crack­er shut­down, for 16 months, had cost $2 bil­lion.

"That did take me by sur­prise be­cause the $2 bil­lion that was spent over the pe­ri­od when the cat crack­er was out of ser­vice was re­al­ly for pur­chas­ing blend­ing stock-and let me just ex­plain, we did not stop the re­fin­ery over the last few years. The re­fin­ery has been run­ning." He said it was tak­en out of ser­vice in No­vem­ber or De­cem­ber last year, but the re­fin­ery was still pro­duc­ing gaso­line and diesel.

"In gen­er­al, that wasn't an ex­pen­di­ture over which heads should roll, as I saw on one TV?chan­nel, but it was more of an op­er­at­ing ex­pen­di­ture for blend­ing stock." He said the in­tent of the up­grade in 2006 was to in­crease ca­pac­i­ty from 26,000 to 35,000 bar­rels and be com­plet­ed by 2008.

How­ev­er, he said the con­tract com­prised first­ly a lump sum por­tion for en­gi­neer­ing, pro­cure­ment and some man­age­ment and fab­ri­ca­tion ser­vices and sec­ond­ly, the rest of the works was let on a cost re­im­bursable ba­sis, mean­ing that Petrotrin took all the costs of con­struc­tion. He said since then the cost es­ti­mate was re­vised twice in 2008 and 2010.

"The point is the re­im­bursable na­ture of this pro­cure­ment process has not worked for us, be­cause the project, due to fin­ish in 2008, is now be­ing com­plet­ed in 2012 and the cost has al­so moved from US$156 mil­lion" to US$439 mil­lion.

"And there­fore, there have been de­lays, there have been cost over­runs, and on­ly with­in re­cent times, with­in some­time this year that we have had some ex­tra de­lays-one was a broil­er ac­ci­dent and the oth­er was, un­for­tu­nate­ly a death in the re­fin­ery.

"That cost us be­tween one and three months' de­lay. But not the enor­mous de­lay and the enor­mous cap­i­tal over­run as a re­sult of the procur­ing process which was then put in­to place." He said the cat crack­er up­grade is ex­pect­ed to be com­plet­ed in the next cou­ple of weeks and will see a much more ver­sa­tile re­fin­ery.

This cat crack­er project-more for­mal­ly called the flu­idised cat­alyt­ic crack­ing unit (FC­CU) up­grade-was part of the wider Gaso­line Op­ti­mi­sa­tion Pro­gramme (GOP), which al­so in­clud­ed con­struc­tion of an Iso­meri­sa­tion Unit, a Con­tin­u­ous Cat­a­lyst Re­gen­er­a­tion Plat­form­ing Unit (CCR), an Alky­la­tion Unit/Acid Plant, up­grade to the ex­ist­ing FC­CU (al­so called the Cat­crack­er) and con­struc­tion of off­sites and util­i­ties.