BNamericas.com (Carlos Camacho): Venezuela's state oil firm PDVSA plans to invest US$265 million to upgrade the Kingston, Jamaica refinery to process its extra-heavy crude and increase capacity.

"All those works are generating a system of refining, distribution and storage in the Caribbean region," PDVSA president and energy and oil minister Rafael Ramirez said in a speech at PDVSA headquarters.

PDVSA has a 49% stake in the Kingston refinery and Jamaican refiner Petrojam owns the balance. PDVSA signed an agreement with Jamaica's state oil company PCJ and Petrojam in 2005 for refinery works.

Upgrades at Kingston, which can produce 35,000 barrels a day (bpd), are due to wrap up by 2008.

CUBAN REFINERY

In addition, the Cienfuegos refinery in Cuba is due to start the initial stage of its operations imminently, Ramirez said. According to a previously published PDVSA schedule, Cienfuegos could start operations by the third quarter 2007.

PDVSA and its Cuban counterpart Cupet signed a joint venture in April this year to reactivate the Cienfuegos refinery, which could produce 65,000-76,000bpd.

Canadian company SNC-Lavalin is involved in the Cuban and Jamaican projects.

PetroCaribe

• The two refineries are crucial to the success of the PetroCaribe energy cooperation initiative that Venezuela is promoting in the region.

PDV Caribe, the PDVSA subsidiary handling PetroCaribe supplies, is also planning to set up a collection and storage point in Cuba to distribute liquid fuels to other PetroCaribe member countries.

Other PetroCaribe members include the following: Antigua & Barbuda; the Bahamas; Belize; Guyana; Grenada; Dominica; the Dominican Republic; Saint Vincent & the Grenadines; Saint Lucia; Saint Kitts & Nevis; and Suriname.

Under PetroCaribe, member countries can finance up to 60% of their fuel bill over 90 days with the remaining 40% financed over 23 years with a two-year grace period and 1% annual interest rate.

PDVSA to invest US$265 million in Kingston refinery