Chinese Firm Recommended for Upgrade of VDU at Petrojam

Minister of Science, Energy and Technology, Dr. the Hon. Andrew Wheatley, says Chinese firm, Sinohydro, has been recommended as the contractor to undertake the first phase of the refinery upgrade project, which is the improvement of the Vacuum Distillation Unit (VDU) at Petrojam.

Addressing the House of Representatives on July 3 at Gordon House, the Minister noted that in February 2017, Cabinet approved a joint Petróleos de Venezuela, SA (PDVSA)/Government of Jamaica Task Force to begin negotiations with Sinohydro to execute the engineering, procurement and construction services for the refinery upgrade project.

“As at June 2018, negotiations are still under way. No agreement has yet been signed and no money has been spent with Sinohydro to undertake any work relating to the upgrade of the VDU at Petrojam,” Dr. Wheatley said.

He informed that the preliminary estimate submitted on April 5, 2018 by a United States engineering firm to construct the VDU, based on US standards, was US$87.6 million (with +/-30 per cent estimate accuracy), which means that the estimate could vary anywhere from US$61.32 million to US$114 million, depending on numerous factors.

Dr. Wheatley also informed that estimates were also received from Sinohydro to upgrade the VDU, using Chinese Standards, with an estimate of US$91.3 million in 2017; and western standards, approximately US$119 million.

“It must be noted that the estimate from the US engineering firm is still in the process of being reviewed and validated by the Task Force to ensure that all factors pertinent to this estimate have been considered and included,” he said.

The Minister added that, to date, the review of the US engineering firm’s estimate unearthed some deficiencies, which have been acknowledged by the firm, and Petrojam is now awaiting an updated estimate from the US engineering firm in order to complete validation.