A Chinese company, Sinohydro, will lend Petrojam USD$1-billion or approximately JMD$127-billion to upgrade the state-owned oil refinery.
That’s according to Energy Minister, Dr. Andrew Wheatley.
The Jamaican and Venezuelan governments signed an agreement in the Venezuelan capital, Caracas, on Wednesday, to carry out the expansion of the refinery.
Venezuela’s state-owned oil refinery, PDVSA, has a 49-percent stake in Petrojam.
The upgrade of the Petrojam refinery has been long in coming. It’s been in the making for a decade.
However, a number of factors, including financing, prevented Jamaica from going ahead with the upgrade.
But that hurdle has seemingly been cleared.
Minister Wheatley says the Chinese-based firm, Sinohydro, will undertake financing, engineering, procurement and construction for the project.
He says Petrojam will then repay the USD$1-billion loan from proceeds of sales from the refinery.
Dr. Wheatley says the terms of the loan have yet to be finalized.
Sinohydro is a Chinese state-owned company founded in 1950.
According to its website, it has 486 international projects under construction in more than 72 countries, with total contract value of nearly USD$43-billion.
Dr. Wheatley says the next steps will involve the establishment of a task force comprised of five representatives of Venezuela and Jamaica within the next month.
The team will have responsibility for finalizing contractual arrangements with Sinohydro for project execution.
Dr. Wheatley says the project would provide greater employment and put Jamaica in a position to export refined petroleum in the Caribbean.
He says the upgrade would see Jamaicans spending less at the pumps and on their electricity bills.
Dr. Wheatley says the finalization of this deal is a signal of the ability of the current JLP administration to get things done.
The expansion of the Petrojam refinery will see its capacity increased from 35,000 barrels of petrol per day to 55,000.
Dr. Wheatley says it’s pivotal to securing energy for growth and economic development.