US$4 Million for Emergency Work at Petrojam

The cost to date for the emergency work carried out at Petrojam Limited to maintain operations, in light of the recent damage to the loading pier, is approximately US$4 million, Minister of Energy and Mining, Hon. James Robertson, has revealed.
The Minister also informed that the cost for rebuilding a new pier is estimated at US$20 million.
Mr. Robertson was making his contribution to the 2009/10 Sectoral Debate in the House of Representatives, on July 1.
A month ago, the vessel, M/T Great News, was transporting crude oil to the Petrojam refinery, when it ran into the company’s dock, causing enough damage to temporarily put it out of service.
Mr. Robertson pointed out that while the refinery is down, it costs US$78,000 per day in refinery margin opportunity lost. “The refinery is Jamaica’s largest manufacturing plant, so for every day that it is out of operation, Jamaica and our nation suffer huge losses. It is critical to our energy security,” he said.
The Minister noted that Petrojam’s unaudited accounts show that approximately $7.7 billion of losses were booked for fiscal year 2008/09, and that these losses were attributable to the standard accounting methodology used in the petroleum sector.
“It’s also accountable to the fact that stocks purchased when oil topped US$147 per barrel, were re-valued and sold competitively, when oil plummeted below US$40 per barrel; and to the movement of the Jamaican dollar during the year,” he further informed.
Mr. Robertson said a small amount of those losses are also attributable to the marketing and roll-out expenses associated with the introduction of the E10 Programme.
He added that the Finance Ministry, as mandated by Cabinet, is currently examining these losses.
Meanwhile, the Minister informed that as of March 2009, the latest capital expenditure estimate is approximately US$770 million, to complete the Refinery Upgrade Project, which sets out to upgrade Petrojam.
Turning to the Petcoke project, which he said is a direct off-shoot of the Refinery Upgrade Project, Mr. Robertson informed that Petrojam, the Petroleum Corporation of Jamaica (PCJ) and the Jamaica Public Service Company (JPSCo), are developing a Memorandum of Understanding (MoU) to construct an approximately US$300 million electricity-generating plant, which will produce approximately 120 Mega Watts.
“It’s a cogeneration petcoke-fired power facility at JPSCo’s Hunts Bay site in St. Catherine. The petcoke is a by-product of crude oil processed by Petrojam after the upgrade. Significantly, petcoke is the cheapest petroleum-based product that can be used for electricity generation, using current generating technology,” the Minister noted.
Petrojam Limited, the country’s sole petroleum refinery, is a subsidiary of the PCJ, a statutory body created and wholly owned by the Government of Jamaica. The company supplies Jamaica with a full range of domestic, transportation and industrial petroleum products. In addition, approximately 10 per cent of total sales volume is exported.