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Petrojam Limited, operator of Jamaica’s sole petroleum refinery, spent about US$2 million on plant improvements that are expected to deliver payback in under a year.
Since July, the state-owned oil refinery has increased its asphalt production to a projected 230,000 barrels annually, up from 84,000 barrels – one barrel is equal to 42 US gallons, or 119.27 litres – and Petrojam is projecting additional earnings of up to US$2.4 million ($380 million) per year.
General Manager Telroy Morgan says a revolutionary system was added to the decades-old refinery that uses a process called hydro-skimming to separate various petroleum products from crude oil.
Heavy fuel oil, HFO, which is extracted from crude, is more associated with electricity or power generation. But now, Petrojam is further processing the HFO “under vacuum conditions” to produce bitumen, or asphalt, utilising a system that was devised in-house.
The expected payback period for the HFO-to-asphalt project is almost immediate, based on the projected annual earnings of US$2.4 million.
“That, I would say, is a conservative number, because knowing my team, our aim is to make sure that we’re going to be sweating the assets with a view to have this payback sooner than the one year,” he said in an interview with the Financial Gleaner on Tuesday.
Petrojam’s Production Manager, Rochelle Bramwell, said that starting with HFO, the complex but well-integrated system of heated storage tanks, super-duty pumps, a series of heaters and a mixer, the vacuum distillation system and some converted intermediate storage tanks all combine to crank out 230,000 barrels of asphalt, needed for road construction and maintenance, plus other usages.
“At the end of the process, we produce the bitumen that is one of, let’s say, the inputs into asphalt, and we also produce vacuum gas oil ... those are the two main products that we get from the vacuum distillation unit,” said Bramwell.
“The bitumen in general is around 50 per cent of what we feed (into the system). The vacuum gas oil is to a lesser extent – maybe 10 to 20 per cent,” she said.
Petrojam said in a release that the HFO-to-asphalt conversion project was conceptualised and designed by in-house cross-functional teams, saying it demonstrated the company’s capacity to deliver complex capital projects with local expertise.
Buoyed by the success of the project so far, the company is constructing a new asphalt storage tank, which is expected to be completed in another year, Bramwell said. That project is estimated to cost US$6.1 million, according to the latest Jamaica Public Bodies report.
Morgan said the new process serves to sequester carbons and effectively lowers the refinery’s emissions, which he described as the “realm of decarbonisation”.
“It cuts right across the value chain from just innovation, (with) staff being included, being engaged, being focused on the strategic vision ... to making sure that Petrojam remains fit and purpose-built in terms of our reduction of our carbon footprint,” he said.
Regarding market response to the new development, Morgan said about 50 per cent of overall asphalt production is utilised locally on various projects, and the rest is exported.
He added that the product was in high demand.
“I remember a company, about a year ago, wanted to forward-buy the production volumes from that time,” he said. “It just goes to show that there is a very ready market for the bitumen and the off-takers are queuing up, ready to buy our product.”
Petrojam is able to produce so-called ‘performance-grade asphalt bitumen’, which is utilised by airports, and was involved in the supply of bitumen for the Norman Manley and Sangster International Airport runway improvement projects, Morgan said.
The refinery is now considering investing in a bigger vacuum unit to produce more asphalt bitumen for export, Morgan said.
Petrojam is going further into the production of asphaltic concrete, and is currently experimenting with discarded tyres.
“We have done some trials,” said Morgan. “We’re into validating those trials and, by early next year, we want to ramp up the efforts in (converting) rubber into bitumen as a part of what we do for our Jamaican roads,” he said.
The new revenue expected from ashpalt is a fraction of the refinery’s current turnover of an estimated US$1.16 billion in the past fiscal year, and the projected US$1.26 billion for year ending March 2026.
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