Cuban-Venezuelan oil refinery startup on schedule

HAVANA (Reuters) - Processing at a Cuban-Venezuelan oil refinery is on schedule two months into operations with gasoline output beginning this month and expansion plans on the drawing board, a company executive told a local newspaper this week.

"The Cienfuegos oil refinery continues its satisfactory start up ... that up to March 2 had processed 2,239,263 barrels," the Cienfuegos province Communist party weekly newspaper, Fifth of September, reported this week.

The director of expansion work at the refinery, Julio Sanchez, told the local press the refinery began processing crude on January 8, had now reached its initial capacity of 65,000 bpd and would begin producing gasoline on March 21.

He said the refinery was currently producing liquid gas, naphtha, jet fuel, diesel and fuel oil.

The refinery was expected to produce 48 percent fuel oil, 18 percent diesel, 12 percent gasoline, 10 percent jet fuel and 10 percent liquid gas for the domestic market and export to other Caribbean countries.

The refinery, located in the port city of Cienfuegos, 155 miles southeast of Havana, is owned be PDV-CUPET S.A, a joint venture between state-run Petroleos de Venezuela (PDVSA) and CubaPetroleo (CUPET).

Plans call for the refinery, left near completion when the Soviet Union collapsed, and put into operation at a cost of around $150 million, to process eventually 150,000 bpd and feed a still-unbuilt petrochemical industry in the area.

Sanchez said the $1.3 billion expansion would get under way in 2009 and go into operation in 2013.

"It will have the most modern conversion plants, that generate more profit, designed to extract byproducts for the petrochemical industry," he said.