Underlining Venezuela’s commitment to large-scale investment projects on the island, preparation work for construction of a new, 150,000 barrel-a-day joint venture refinery in Matanzas is underway. The construction start is happening 15 months after Cuba and Venezuela signed a first memorandum of understanding.
Communist Party daily Granma reported the news Thursday in the last paragraphs of an article about Vice President Ramiro Valdés touring the province of Matanzas. News about progress in the construction of a $500 million, joint venture ferronickel smelter in eastern Cuba last month triggered harsh reactions by opposition politicians and Chávez-critical media in Venezuela, which is going through an economic downturn.
Valdés “examined the tasks assumed by different entities” in the refinery project, according to Granma. Work is underway “to prepare the workforce, freight transportation, and electrical and water infrastructure” necessary for the construction.
At a bilateral meeting Dec. 14 in Havana, Cuba and Venezuela signed a slew of documents, including a change in name and purpose of the PDVCUPET S.A. joint venture. The company — now called Cuvenpetrol S.A. — was originally set up in 2006 between a branch of Cuban state oil company Cupet and the Cuba subsidiary of Venezuelan state oil company PDVSA to modernize and expand the refinery in Cienfuegos.
The joint venture is now in charge of “development and operation of the oil refining, liquid natural gas, and compressed natural gas systems in the Republic of Cuba,” including the expansion of refineries in Cienfuegos and Santiago de Cuba, construction of a plant at Cienfuegos that will regasify liquid natural gas, and construction of the new refinery in Matanzas, according to a PdVSA press release.
The partners have not announced a timeline or investment cost for the Matanzas project, but refineries this size typically require at least a $1 billion investment. Nor have they said who will be the contractor. In the Cienfuegos expansion project, one of the bidders has been China Huanqiu Contracting & Engineering Corp. HQCEC, a subsidiary of China National Petroleum Corporation (CNPC), has built two refinery and dozens of petrochemical and fertilizer projects in the past 10 years. The company is apparently negotiating to take an equity stake in the Cienfuegos refinery.
The Matanzas refinery will partly be supplied with crude via a Soviet-era pipeline to the southern port of Cienfuegos, which will have to be rebuilt. It will also be fed via a Soviet-era supertanker terminal at the port of Matanzas, which will require some investment to bring it up to date. Venezuela will be the main crude-oil supplier, but the refinery would be the primary processor of Cuban offshore oil, should commercial amounts be found in the Gulf of Mexico.
Valdés, according to Granma, also visited the international airport in Varadero, which is undergoing an expansion, and a new fuel-oil power generation cluster. In his tour of the province, he was accompanied by Transport Minister Jorge Luis Sierra Cruz, Basic Industries Minister Yadira García, Vice President Ricardo Cabrisas, Construction Minister Fidel Figueroa de la Paz, and provincial officials.
