Lavalin Plans New Orinoco Extra-Heavy Crude Upgrade Complex

Canadian construction firm SNC-Lavalin is drawing up engineering plans for an extra-heavy crude upgrade complex with initial processing capacity of 200,000 barrels a day of Orinoco crude, Venezuela's state oil firm PDVSA deputy president for refining Alejandro Granado told reporters.

Lavalin became involved in the project last year and its work is almost concluded, although the company could still remain involved when the actual construction phase begins, the official said.

"The first module will start in 2010 with 200,000 barrels a day [b/d] and go up to 800,000b/d" at an unspecified date, Granado said. The official declined to put a price tag on the project yet, saying it is too soon to know for sure.

The resulting crude from the new Orinoco upgrading unit, which will be medium oil of 16 degrees API, will then be refined at the Abreu de Lima refinery in Pernambuco, Brazil, a joint venture being planned by PDVSA and Brazil's federal energy company Petrobras (NYSE: PBR).

The new upgrading unit will be the fifth to be built in Venezuela for Orinoco extra-heavy crude. Four existing Orinoco projects currently produce a total 500,000b/d and they all have their own upgrading units.

Just like crude from Canada's own Athabasca oil sands in Alberta, Orinoco's extra-heavy crude needs to be upgraded before it can be shipped, an extra step that costs billions of dollars.

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