Bahamas refinery project faces 'uphill climb'

Expansions at existing refining facilities would be the best economic option for covering growing demand for petroleum products in Latin America, according to an industry consultant.

"While we expect that there will be incremental demand growth in Latin America, we feel most of that will be most economically met by brownfield expansions on the US Gulf Coast or perhaps in other parts of the Western Hemisphere," John Auers, executive VP at engineering consultants Turner, Mason & Company, told BNamericas when asked about Oban Energies' project in the Caribbean.

Read Bahamas approves US$5bn oil complex

According to Auers, the US Gulf Coast refining industry now dominates the world due to competitive advantages such as size, complexity, efficiency, feedstock supply and natural gas cost.

In BNamericas' Oil and Gas Intelligence Series report Refining in Latin America: Fuel Imports on the Rise, IDB lead oil and gas specialist Ramón Espinasa highlights the economic benefits of operating a refinery in a cluster on the US Gulf Coast due to available infrastructure and specialized services.

"I believe it will be very difficult to get this [Bahamas] project financed, especially phase two. Certainly the scope of phase one is more reasonable, but still a very uphill climb," said Auers, who expects flat demand in the US and Canada.

For a look at regional refinery works in the pipeline, go to the BNamericas Project Profiles Database which includes:

In a related development, Ecuador's state oil company Petroecuador has updated its website to include a link to register for the Manabí refinery project.