Pernambuco suitable site for refinery, Petrogal says

Friday, March 21, 2003

A study conducted by Portuguese oil company Petrogal has identified the Brazilian state of Pernambuco as the country's most suitable to build a new refinery, O Estado de S. Paulo reported Friday.

Petrogal has considered investing in refining in partnership with Petrobras, the Brazilian state-run energy giant.

Petrogal concluded that Pernambuco has the best port of the Northeast. Apart from that, it is at a 300-kilometer radius from the main consumer markets of the region, which facilitates the logistics of fuel distribution, the study concluded.

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Three Brazilian states compete aggressively for the new refinery. Apart from Pernambuco, there is Ceara in the Northeast and Espirito Santo, a major oil producing state, in the Southeast.

But Petrogal's refinery project has been at a standstill since 2000, when the study was conducted by the Portuguese company, because Petrobras apparently lost interest in it, O Estado reported.

Originally, the refinery would have capacity to process 200,000 barrels per day. The refinery would require investments of $2 billion.

by Ana Mano