Human Rights in Cuba

Time To Change

Calendar
November 2010
M T W T F S S
« Oct   Dec »
1234567
891011121314
15161718192021
22232425262728
2930  
Waiting for help
Waiting for help

Cuba deal boosts 's Latin American oil plans
Wed Nov 24, 2010 8:39pm GMT
* Cuban refinery is China's latest Latin American deal
* Asian giant set to get 500,000 bpd of crude from deals
* Panama Canal expansion may boost Cuba as oil center
By Esteban Israel

HAVANA, Nov 24 (Reuters) – China is taking another great leap forward in
its Latin American energy plans, raising Cuba's energy importance in the
process, with a deal to lead a $6 billion refinery expansion project on
the communist island, experts said this week.

The project, to be funded mostly by China's Eximbank, is the latest of
several significant moves in the region for the Asian power as it
continues to expand its global influence.

For Cuba, the refurbishing of its antiquated refinery in the coastal
city of Cienfuegos will provide an outlet for oil it hopes to tap soon
in the Gulf of Mexico, while also laying the groundwork for the island
to possibly become a key oil transhipment point for the Caribbean basin.

A unit of state-owned China National Petroleum Corp [CNPET.UL] expects
to begin work in early 2011 on the project that will more than double
the refinery's capacity to 150,000 barrels daily and include
construction of a liquefied natural gas terminal.

, Cuba's closest ally, will provide financial guarantees in the
form of oil, a pattern followed by Beijing in other deals for energy in
Latin America.

In the past two years, China has financed projects and formed joint
ventures in Venezuela, Brazil and Ecuador which are expected to bring it
at least 500,000 barrels of crude oil per day.

It has leased a 5 million barrel storage facility on the Caribbean
island of St. Eustatius and reportedly talked with San Antonio,
Texas-based refining giant Valero Energy Corp. (VLO.N: Quote) about
buying its refinery on the island of Aruba.

The oil marriage of China with Latin America is one made in energy
heaven, said analyst RoseAnne Franco at energy and mining consulting
firm Wood Mackenzie in Houston.

"The regions are clearly of complementary interest. China is looking for
energy security while Latin America is eager for new consumer capital
markets," she said. "There is a good foundation there for the relationship."

MODERNIZING CUBAN INFRASTRUCTURE

The Cienfuegos project is part of larger modernization of Cuba's energy
infrastructure. Brazil is financing the refurbishing and expansion of
the port at Mariel, which will be the logistical platform for offshore
oil operations in the Gulf of Mexico set to begin next year.

Venezuela, Cuba's principal ally and top trading partner, is
refurbishing a tanker port at Matanzas and rehabilitating a
cross-country pipeline to the Cienfuegos refinery. It has also committed
to constructing a 150,000 barrel per day refinery at Matanzas, which is
about 60 miles (96 km) east of Havana.

The expectation that Cuba will find significant offshore oil reserves is
driving much of the work.

Several companies are planning to sink exploratory wells off Cuba's
northern coast starting next year.

The U.S. Geological Survey has estimated Cuba has about 5 billion
barrels of oil and 10 trillion cubic feet of natural gas offshore, but
Cuba says it could have at least 20 billion barrels of oil.

The other, larger piece of the puzzle is the expansion of the Panama
Canal, which is supposed to be finished by 2014 and will allow bigger
oil tankers to use the waterway linking the Pacific and Atlantic oceans.

Cuba is well positioned to serve as both a refining center and oil
transhipment point for the newly expanded canal, said Jonathan
Benjamin-Alvarado, a Cuban oil expert at the of Nebraska in
Omaha.

"Cuba doesn't solve anybody's energy issues, but it expands the
opportunities of the global markets to have Cuba as another point of
transhipment or hub for oil services and activities," he said.

"There is a need for expansion and diversification of both refining and
storage capacity in the region, and Cuba fits perfectly," he said.

Should normal relations with the United States ever be restored, Cuba,
just 90 miles (145 km) from Florida, would be well positioned to serve
the U.S. market, said Jorge Pinon, an oil expert at Florida
International University in Miami. (Editing by Jeff Franks and Todd Eastham)

http://af.reuters.com/article/energyOilNews/idAFN2417046320101124?sp=true

Leave a Reply

Your email address will not be published. Required fields are marked *

Zapata lives
Zapata lives
No place to live
No place to live