Curacao looks to import LNG, upgrade refinery

OREANDA-NEWS. July 21, 2016. Tiny Dutch-controlled Curacao has joined the ranks of aspiring regional LNG hubs in tandem with a proposed upgrade of its Isla oil refinery operated by Venezuelan state-owned PdV.

The Curacao government-controlled refinery company RdK was scheduled to receive proposals at the end of June to build, own and operate an LNG import and trans-shipment terminal at the deepwater port of Bullen Bay by 2021, according to US project consultancy Poten & Partners.

"We received much interest for the [request for proposals] for the LNG Terminal for Curacao," a local refinery project manager tells Argus.

The facility would supply gas to the domestic market and to the 335,000 b/d refinery at Willemstad, 12.9km (8mi) from Bullen Bay. It could also be used to supply neighboring markets as a distribution hub, a role that Panama, the Dominican Republic and Jamaica are also looking to play. Among Curacao's advantages is its existing deepwater port and proximity to future markets such as Colombia.

Curacao's LNG project would allow the refinery to convert from residual fuel oil to natural gas, one step in an effort to address a legacy of environmental damage at the refinery site.

PdV?s long-term refinery lease expires on 31 December 2019. The lease will automatically renew for another 10 years unless Curacao specifically gives notice not to renew it.

The government will seek to sign a new 20-30 year operating lease tied to the new project, with a "preferred strategic option" of continuing with PdV, according to a presentation by Curacao's Multi-Disciplinary Project Team (MDPT) that is coordinating the refinery and LNG projects.

PdV currently uses Bullen Bay and the refinery for oil trans-shipment and crude processing.

In theory, Venezuela could supply an LNG terminal at Curacao. Caracas has long aspired to export LNG from extensive offshore deposits, but sparse capital and limited gas experience have thwarted its ambitions.

Curacao plans to issue a separate request for proposals for the refinery project.

The proposed upgrade of the refinery would include multiple new units, including a delayed coker, naphtha hydrotreater, light naphtha isomerization, continuous catalytic reformer, distillate hydrotreater, FCC gasoline hydrotreater, VGO hydrotreater, naphtha splitter and an FCC gasoline splitter.

Depending on the how the refinery and LNG projects are designed, the overall cost ranges from \\$1.95bn to \\$3.1bn, according to consultancy estimates issued by the MDPT.

Neither MDPT nor Poten & Partners would comment on the response to the request for LNG proposals.