HAVANA (Reuters) - Processing at a Cuban-Venezuelan oil refinery is on schedule two months into operations with gasoline output beginning this month and expansion plans on the drawing board, a company executive told a local newspaper this week.
"The Cienfuegos oil refinery continues its satisfactory start up ... that up to March 2 had processed 2,239,263 barrels," the Cienfuegos province Communist party weekly newspaper, Fifth of September, reported this week.
The director of expansion work at the refinery, Julio Sanchez, told the local press the refinery began processing crude on January 8, had now reached its initial capacity of 65,000 bpd and would begin producing gasoline on March 21.
He said the refinery was currently producing liquid gas, naphtha, jet fuel, diesel and fuel oil.
The refinery was expected to produce 48 percent fuel oil, 18 percent diesel, 12 percent gasoline, 10 percent jet fuel and 10 percent liquid gas for the domestic market and export to other Caribbean countries.
The refinery, located in the port city of Cienfuegos, 155 miles southeast of Havana, is owned be PDV-CUPET S.A, a joint venture between state-run Petroleos de Venezuela (PDVSA) and CubaPetroleo (CUPET).
Plans call for the refinery, left near completion when the Soviet Union collapsed, and put into operation at a cost of around $150 million, to process eventually 150,000 bpd and feed a still-unbuilt petrochemical industry in the area.
Sanchez said the $1.3 billion expansion would get under way in 2009 and go into operation in 2013.
"It will have the most modern conversion plants, that generate more profit, designed to extract byproducts for the petrochemical industry," he said.
CUBAN REFINING CAPACITY
There are two other operating refineries in Cuba. The Nico Lopez in Havana and Hermanos Diaz in Santiago de Cuba, 540 miles (860km) to the east of the capital.
The two refineries, with a maximum real capacity of around 65,000 bpd according to various industry sources, have processed 42,000 bpd of Venezuelan oil mixed with 20 percent Cuban heavy crude in recent years, almost exclusively for domestic use.
Venezuela is involved in upgrading both refineries.
Cuba consumes a minimum 160 bpd of petroleum products, of which up to 98,000 bpd comes from Venezuela in a barter exchange, according to Cuban officials, for medical and other services and technical assistance involving at least 40,000 Cubans working in the South American country.
The rest is pumped from Cuba's northwest coast along with gas for power generation.
Oil-rich Venezuela under President Hugo Chavez has become a close ally of Cuba which is an enthusiastic supporter of Chavez's regional integration proposal, the Bolivian Alternative for the Americas, aimed at countering U.S. influence in the region.
As part of bilateral integration efforts Venezuela is revitalizing Cuba's downstream operations and plans to use the island as a bridge to supply the Caribbean with crude and derivatives with preferential financing.
In addition to the Cienfuegos refinery, PDVSA and CUPET have formed joint ventures to operate a Soviet-built supertanker port on the northern coast, a cross-country pipeline from the port to the refinery, and a joint tanker company to move petroleum products in the Caribbean.
The two companies are also exploring for oil on land and in Cuba's Gulf of Mexico waters.
(Reporting by Marc Frank, editing by Matthew Lewis)
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