Prime Minister, the Honourable Dr Keith Rowley has announced that a preferred bidder has been selected for the sale or lease of the state-owned Point-a-Pierre refinery in Trinidad & Tobago. The refinery was moth-balled in 2018, amidst a radical restructuring of Petrotrin, the integrated national oil company. The upstream portion of Petrotrin was spun off into Heritage Petroleum (one of the sponsors of the upcoming Trinidad and Tobago Energy Conference, 31st May – 2nd June 2022 while the refinery was put up for sale or lease. 

This is the second attempt to find an investor for the refinery with four international companies shortlisted and bids recently being submitted for evaluation.  The first attempt to find a potential bidder failed to proceed after the identified investor, Patriotic Energies and Technologies Company Limited (owned by the Oilfield Workers Trade Union), was unable to complete the transaction.

Strategic location

 With a history stretching back a hundred years, the refinery was at one time a key refining asset in the western hemisphere and especially during the Second World War, when it provided fuel for convoys of Allied ships on the vital trans-Atlantic routes.  At the time of its closure in 2018 it had a capacity of around 140,000 barrels per day and had undergone a series of upgrades over the decades.   

The refinery had originally been established to process crude oil produced in Trinidad & Tobago for international markets, but as Trinidad’s oil production began to decline in the 1980s it increasingly relied upon imported crude for processing and exports to regional markets. 

While the refinery faced challenges with high costs and an inflexible industrial relations framework, there are potential opportunities for the facility not least because of its strategic geographical location and the potential availability of additional low carbon fuels for blending (including methanol and clean diesel from a co-located GTL facility). 

Opportunities for contractors

At the time of the closure of the refinery one of the key reasons given by the Board of Petrotrin was the fact that significant additional capital expenditure was required to complete the upgrade and in particular to complete and commission the ultra-low sulphur diesel plant. 

News of a potential new investor in the refinery will be welcomed by local contractors who would hope to be able to offer many of the construction, refurbishment and maintenance services needed to bring the facility back into production.  Prior to the closure, the refinery was an important customer for many contractors and service companies, including many small and medium-sized companies in south Trinidad.  The significant investments needed in asset integrity for the facility could provide a significant boost to local contractors and service companies.

In a survey conducted at the time of the closure of the refinery in 2018, fifty nine percent of contractors certified to work in the energy sector reported that they provided goods or services t o the refinery.  On average if accounted for 25% of the business of the contractors who had the refinery as a customer (hyperlnk: https://energynow.tt/blog/what-is-the-likely-impact-of-the-refinery-shut-down-on-contractor-and-energy-service-companies