Citgo reaches deal to lease and restart idled Aruba refinery
ORANJESTAD (Reuters) - The Citgo Petroleum refining unit of Venezuela's state oil company Petroleos de Venezuela SA (PDVSA) has reached a deal to lease and restart an idled 235-Mbpd refinery in Aruba, according to the government of the Caribbean island.
The agreement involves a 25-year lease that would allow Citgo to operate the refinery after investing in an overhaul that is estimated to cost at least $1 B. The idled refinery, formerly operated by Valero Energy Corp., 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, who added that details would be forthcoming.
Valero halted refining operations in Aruba in 2012 due to low profits and classified the facility as "abandoned" in 2014, except for terminals currently used by the US company and PDVSA.
Aruba offers an opportunity for PDVSA to produce heavy naphtha that it currently imports as diluent for its extra-heavy oil output. It would also produce refining feedstock for Citgo.
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.
Written by Sailu Urribarri; reporting by Alexandra Ulmer in Caracas and Marianna Parraga in Houston; writing by Alexandra Ulmer; and editing by Tom Brown
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