Abreu e Lima Refinery, Pernambuco, Brazil

The Abreu e Lima refinery is under construction at Suape Industrial Port Complex in the State of Pernambuco, Brazil. The complex spreads across 13,500ha and includes various port, industrial and trade facilities. Once complete, the refinery will process heavy oil from Venezuela and Brazil and primarily produce diesel.

The Abreu e Lima refinery project is a part of the regional cooperation and integration strategy of South American countries wherein Venezuelan state-owned company Petroleos de Venezuela (PDVSA) and Brazilian company Petrobras will together construct and operate the refinery.

In 2006, then-Presidents of Venezuela and Brazil, Hugo Chavez and Luiz Inacio Lula da Silva, laid the cornerstone for the construction of the Abreu e Lima refinery. The total investment in the facility was originally estimated to be $4bn but by 2009, it increased to $12bn.

The refinery will be onstream by 2010, and is expected to reach its full capacity of 200,000 barrels of oil a day (bpd) by the first quarter of 2011. The key objective of the refinery is to meet the increasing demand for by-products in the north-eastern region and allow it to be self-supplied.

Petrobras and PDVSA signed a partnership agreement in March 2008 to develop the Abreu e Lima refinery in Pernambuco. Petrobras will hold a 60% stake and the remainder will be acquired by PDVSA. To acquire its stake, PDVSA will pay Petrobras $400m in cash towards 40% of the construction expenditure. Petrobras has already invested $1bn for construction and procurement of equipment.

Abreu e Lima refinery construction

The construction of Abreu e Lima refinery is scheduled 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. Basic feasibility report was approved during this phase.

The investment estimate has been revised to $12bn and the production capacity increased to 230,000bpd. The revised investment estimate is yet to be approved by the executive board of the joint venture. 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 is the project execution phase where 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. They will be erected at the site in 2010.

Phase V will include the final documentation of the project.

Water treatment plant

Veolia Water Solutions & Technologies, a subsidiary of Veolia Water, won a €119m 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.

Contracts

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 would reduce the refinery's total construction cost.

Feedstock

Abreu e Lima refinery is designed to process heavy crude oils including diesel fuel and solid fuels such as liquid petroleum gas, petrochemical naphtha 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. Upgrade crude oil (upgraded Marlim) from this oil field will be processed in Venezuela.

Pipelines

The refinery will have 12 pipelines to carry the crude oil and transport the finished products. These pipelines extend up to a distance of 60km.

Site

Suape Industrial Complex has been selected as the location for the plant. Pernambuco is the second largest consumer of fuel in the north-eastern region of Brazil and the demand for oil products, diesel and LPG has been increasing in this region. As well as having access to the port, the complex had sufficient land required to set up the refinery.