5 months ago
23
Petrojam Limited will replace obsolete and unsafe equipment in the first major upgrade of its power distribution facility since the refinery was established six decades ago.
Jamaica’s sole petroleum refinery aims to develop “a new power facility, substation, replacing outdated infrastructure to meet modern safety and operational standards, and facilitating future expansion of the plant”.
Without the upgrade, the refinery faces potential shutdowns in the event of a failure of the power plant, due to the inability to source parts for the obsolete equipment.
“It has now become a matter of national importance that this project be expedited with urgency,” said Petrojam in the tender document seeking an engineering consultant for the turnkey project.
“The refinery cannot afford to have any major disruption in operations due to the failure of its main power facility which would be irremediable to rectify. It has now become a race against time for a complete replacement before a catastrophe occurs.”
Petrojam plans to spend US$16 million on upgrades during this fiscal year, according to the Jamaica Public Bodies 2025 report published by the Ministry of Finance. But how much of that, if any, is to be spent on the power plant upgrade was not immediately clear. Petrojam gave no indication of the budget.
“The introduction of the new power facility is a significant step for Petrojam. It will augment our electrical power capacity and ability to power additional equipment or projects,” the refinery said in response to Financial Gleaner queries.
The electrical infrastructure to be replaced has been in place since the establishment of the refinery by Esso in 1964. The refinery was later acquired , in 1982, by the Government of Jamaica. And now the equipment is inefficient, dangerous and lacks modernity, Petrojam said.
The 36,000 barrel-per-day hydroskimming refinery produces a variety of petroleum products, namely, liquid petroleum gas, gasolene, kerosene, jet fuel, automotive diesel oil, heavy fuel oil, very-low sulphur fuel oil, asphalt, unleaded gasolene, and ultra-low sulphur diesel. These products cater to the domestic, transportation, and industrial needs of Jamaica.
As disclosed on its website, Petrojam’s average rate of production is 28,000 to 30,000 barrels of petroleum products per day. The refinery supplies about two-thirds of the local petroleum demand outside of the bauxite sector. The business generated US$1.56 billion in revenue at year ending March 2023, but sales slipped in FY2024 to around US$1.33 billion, preliminary numbers show. Its bottom line bled between US$3 million and US$4 million in each of those years.
Within the current year ending March 2025, the Kingston-based refinery is projecting an upturn in revenue to US$1.47 billion and profit of US$8 million.
For the power plant development, Petrojam is seeking an engineering firm with a minimum of 15 years of experience in the design and building of substations; however, the lead electrical engineer must have a minimum of 20 years of experience.
The refinery says its power facility is basically a substation that distributes power to the plant. That’s different from a power plant that ‘generates and distributes’ electricity, Petrojam explained.
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