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Citgo Agrees To Re-Open Aruba Oil Refinery That Closed in 2012

Citgo sign

ORANJESTAD – Aruba’s Energy Ministry said today that it has signed a memorandum of understanding with PDVSA’s U.S. unit Citgo Petroleum to explore reopening and operating the island’s refinery, idled since 2012.

The 235,000-barrel-per-day refinery, which was operated by U.S. firm Valero Energy Corp., closed because of high operating costs and low margins. Attempts to reopen some of its processing units or sell it to firms including Venezuela’s PDVSA and PetroChina have been unsuccessful.

“Citgo will send a group to evaluate the refinery technically and financially,” Aruba’s government said in a statement.

The facility is currently used as an oil storage terminal, with state-run oil company PDVSA among its main clients.

Valero’s CEO said last year that the firm was not interested in reopening it, but PDVSA and Citgo could use the nearby refinery to produce much needed heavy naphtha, used as diluent to make oil more marketable.
But lack of enough deep conversion capacity to transform heavy crudes into light products has been one of the main obstacles to any sale.

PDVSA and Valero did not immediately respond to a request for comment.

Negotiations with Aruba would involve Valero and the Netherland’s government in a later feasibility stage, the memorandum signed in Houston said.

“Citgo would guarantee crude supply [for the refinery] and experience,” the statement said, adding that the contract could cover at least 20 years of operations.

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John McCarthy

John McCarthy

John McCarthy is primarily known for his investigative reporting on the U.S. Virgin Islands. A series of reports beginning in the 1990's revealed that there was everything from coliform bacteria to Cryptosporidium in locally-bottled St. Croix drinking water, according to a then-unpublished University of the Virgin Islands sampling. Another report, following Hurricane Hugo in 1989, cited a Federal Emergency Management Agency (FEMA) confidential overview that said that over 40 percent of the U.S. Virgin Islands public lives below the poverty line. The Virgin Islands Free Press is the only Caribbean news source to regularly incorporate the findings of U.S. Freedom of Information Act requests. John's articles have appeared in the BVI Beacon, St. Croix Avis, San Juan Star and Virgin Islands Daily News. He is the former news director of WSVI-TV Channel 8 on St. Croix.

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