There has been a safe, incident-free shutdown of all Petrotrin refinery operations and preservation and “mothballing” of units is now in progress.
Finance Minister Colm Imbert confirmed this status of Petrotrin operations in Parliament yesterday, during debate on legislation to vest assets, undertakings and obligations of Petrotrin into three companies which will comprise the restructured entity: Heritage Petroleum Co Ltd, Paria Fuel Trading Co Ltd and Guaracara Refining Co Ltd. These were incorporated on October 5 to manage new businesses.
Heritage Petroleum will manage exploration and production and hold responsibility for all E&P assets, including contracts, with revenue generated through crude sales and crude storage.
Fuel trading and product supply activities will be undertaken by Paria Fuel, which will also be responsible for logistics, terminalling and product handling. It’s expected to work closely with Heritage Petroleum.
Guaracara Refining Company Limited will be responsible for the preservation of refinery assets and providing utility services to Paria Fuel Trading and Petrotrin. The latter will remain in existence and continue operating although its major operations will cease on November 30.
On cessation of refinery activities, Imbert said, “The last imported crude cargo was discharged October 10, 2018, and crude processing at the refinery ceased on October 19, 2018. The last process unit (FCCU) was shut down on November 3, 2018, and refinery preservation and mothballing is in progress.
“The Sulphuric Acid regeneration is still in service to convert all spent acid to fresh acid in system as part of the preservation exercise. The fresh acid would be sold locally for use in water treatment facilities.”
Imbert said the first cargo of local crude was successfully exported on November 1, 2018.
On fuel importation, Imbert added, “Through competitive bidding process in which reputable international suppliers were invited, Petrotrin has so far secured four cargos of gasoline, jet fuel and diesel which have already been discharged at Pointe-a-Pierre over the end October to early November,” he said.
“As part of its strategy to maintain security of supply, Petrotrin maintained approximately 14 days of supply ex-refinery production, thus affording seamless supply of fuel to local/regional markets. A total of 16 cargos have been contracted that covers supply until early January.”
As refinery operations are wound down, he said the start of the new corporate structure must be effected to ensure operation of the three companies by December 1. He said the vesting procedure is the same as was used in the 1990s when Trintoc and Trintopec’s assets were vested with Petrotrin. Imbert added it would have been too costly, complicated and would have delayed startup if traditional conveyancing mechanisms were used.
All of Petrotrin’s issued/outstanding shares and those in the new companies have been transferred to a new holding company, Trinidad Petroleum Holdings Limited.
“Petrotrin remains operational as a member of the group of subsidiaries held by TPHL. This will allow Petrotrin to meet outstanding contractual liabilities unhindered and will elude the possibility of Petrotrin bondholders imposing a requirement that they approve the new structure,” Imbert added.
Imbert also detailed progress in refinancing Petrotrin’s US$850 million bond, due August 2019 – among problems Government cited in justifying refinery closure. He said Petrotrin approached financial markets in October for a firm or consortium to refinance its long-term bonds payable in August 2019 and 2022.
“Four respondents were shortlisted and invited to present proposals on October 15 to a team led by two of Petrotrin’s directors and chief financial officer. It was decided two of the consortiums would work together to execute what was essentially the financing of a combination of the Petrotrin exit costs as well as the two bonds,” he said.
“Consortiums comprise Credit Suisse, BladeX and FCB plus the team of Morgan Stanley and Ansa Merchant Bank. Over recent weeks, progress was made with refinancing and they’re working towards having the first tranche of the exit costs settled by November 30, 2018, and the bonds refinanced soon after – well in advance of the terminal dates.”