Abreu e Lima Refinery, Pernambuco

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The Abreu e Lima refinery is under construction at the Suape Industrial Port Complex in the state of Pernambuco, Brazil. The complex covers 13,500ha and includes various port, industrial and trade facilities. Once complete, the refinery will process heavy oil from Venezuela and Brazil, and will mainly produce diesel. The facility will include two delayed coker units, atmospheric distillation units, regenerative caustic treatment units, hydrogen generation units, diesel hydrotreatment unit, naphtha hydrotreatment unit, control houses and substations. The refinery project is part of the regional cooperation and integration strategy of South American countries. Its key objective is to meet the increasing demand for by-products in the north-eastern region of Brazil and allow the country to be self-supplied. The cornerstone for the refinery’s construction was laid in 2006. The refinery was originally to be brought onstream in 2010, but the project has been delayed until 2013 due to financial issues. Petroleo Brasileiro (Petrobras) and Petróleos de Venezuela (PdVSA) signed a partnership agreement in March 2008 to develop the Abreu e Lima refinery in Pernambuco. Petrobras is expected to hold 60% stake and the remainder 40% by PdVSA. To acquire the stake, PdVSA will have to pay Petrobras 40% of the construction expenditure in cash. The total investment in the facility was originally estimated to be $4bn, but increased to $16.4bn in 2011. Petrobras has already invested $1bn in the construction and procurement of equipment. Negotiations are underway for PdVSA to acquire a 40% stake in the project. A previous financing scheme backed by the Brazilian Development Bank (BNDES) could not get through as the guarantors withdrew due to concerns over the European financial crisis. In October 2011, China Development Bank came forward to provide part of the loan guarantees needed by PdVSA. The Abreu e Lima refinery is designed to process heavy crude oils including diesel and fuels such as liquid petroleum gas, petrochemical naphtha, bunker and coke. It will process 16º API Brazilian Marlim crude oil from the Petrobras/PdVSA joint production project in Carabobo 1 block, Orinoco Oil Belt. The refinery will use 12 pipelines to carry the crude oil and transport the finished products. These pipelines will extend up to a distance of 60km. The Suape Industrial Complex was selected as the location for the plant. Pernambuco is the second largest consumer of fuel in the north-eastern region of Brazil, and demand for oil products, diesel and LPG has increased in this region. The complex has sufficient land to set up the refinery and provide access to the port. Construction of the Abreu e Lima refinery is to be completed in five phases. Phase I involved the identification of opportunity. Phase II, the concept phase, was completed in late 2006. The initial investment estimate and the plant capacity of the refinery were finalised during this phase. Phase III took place between 2007 and 2009, and witnessed many changes to the project. The basic feasibility report was approved during this phase. The revised production capacity increased to 230,000bpd. Enhancement of quality requirements of the new processing units, and changes in the deployment schedule and investment profile of the project also took place during this phase. Phase IV involves project execution when the equipment and systems for refining will be installed and finalised for operation. By September 2009, earthworks were almost complete and Petrobras had received eight desalters for the atmospheric distillation unit (ADU). The ADU will be used to dehydrate and desalt the heavy oil to be refined at the refinery. Each desalter weighs 119t, and measures 4m in diameter and 32m in length. Phase V will include the final documentation of the project. The refinery’s construction will generate approximately 28,000 direct and indirect jobs. In September 2009, Veolia Water Solutions & Technologies, a subsidiary of Veolia Water, won a €119m ($171.3m) contract to construct a water treatment and reuse plant at the refinery. Veolia Water will execute the contract under a joint venture with Enfil, a Brazilian water treatment engineering company. The treatment plant will supply 2,100m3 of filtered water and 580m3 of recycled water to the plant every hour. The plant will reuse one third of the water consumed by the refinery. Water will be treated through flocculation and counter-current lamella settling, electro dialysis reversal and ion exchange resign system. In April 2009, a consortium of Camargo Correa, Galvao Engenharia, Queiroz Galvao and Norberto Odebrecht was given contracts for earth-moving works at the refinery site. The bids were for atmospheric distillation, delayed coking, hydro-treatment and hydrogen generation units, for the industrial refuse treatment station, and for the pipe-way and interconnections package. They were cancelled due to high-priced quotes from the contractors. Negotiations are underway to gather better offers that will reduce the refinery’s total construction cost. In December 2009, Petrobras awarded five contracts for the refinery’s execution to different consortium. These include:

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