Citgo Poised To Re-Open Former Valero Oil Refinery In Aruba As Its Own
ORANJESTAD — The Citgo Petroleum refining unit of Venezuela’s state oil company Petroleos de Venezuela, S.A. (PDVSA) has reached a deal to lease and restart an idled 235,000-barrel-per-day refinery in Aruba, the government of the Caribbean island said over the weekend.
The agreement involves a 25-year lease that would allow Citgo to operate the refinery after investing in an overhaul that Aruba said could cost at least $1 billion.
The idled refinery, formerly operated by Valero Energy , could be up and running again within 18 months to two years.
“The agreement is completely formalized,” said Aruba’s Energy Minister Mike de Mesa, adding that details would be announced “shortly.”
Valero halted refining operations in Aruba in 2012 due to low profit and classified the facility as “abandoned” in 2014, except for terminals currently used by the U.S. company and PDVSA, as the Venezuelan state oil company is known.
Caracas-based PDVSA did not immediately respond to a request for comment.
Aruba would offer a good way for PDVSA to produce heavy naphtha that it currently imports as diluent for its extra heavy oil output, and it would also produce refining feedstock for Citgo, sources said earlier this year.
Aruba’s parliament now needs to approve the contract, a formality that is expected to take two weeks. Re-opening the refinery would be a big boost for the small island’s economy.