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Petrotrin/ PPGPL Sign Isobutane Supply Agreement

Executive Chairman
Malcolm Jones

Petrotrin and Phoenix Park Gas Processors Limited recently signed a 15-year agreement whereby PPGPL would provide a supply of up to 3,500 bpd of isobutane for use as an octane enhancer in the manufacture of motor gasoline. As a result of this agreement PPGPL will construct a butane splitting plant that will separate its current mixed butane product into normal butane and isobutane components. Isobutane will be supplied via pipeline to Petrotrin to be used as feedstock to the new alkylation unit now under development.

For the Company, this is an important component of its ongoing Gasoline Optimization Program. Petrotrin will be able to provide a more environmentally friendly fuel to the local and international markets.

This event was celebrated at a Commemorative Signing Ceremony at the Trinidad Hilton on Tuesday May 29^th 2007 and was witnessed by a distinguished assembly of top managers representing the significant companies in Point Lisas and the wider local energy sector.

Petrotrin was well represented by Executive Chairman Malcolm Jones; President Operations Wayne Bertrand as well as other members of the Executive Leadership Team and senior managers.

Frank Look Kin, President of the National Gas Company of Trinidad and Tobago and a Director of Phoenix Park Gas Processors Limited delivered opening remarks on behalf of the Chairman of Phoenix Park Gas Processors Limited Keith Awong.

Frank Look Kin

He said: “The signing of this agreement represents another Phase in the Petrotrin PPGPL relationship which started with the processing of the rich gas from Petrotrin’s Trinmar fields. This opportunity to provide a supply of isobutane for use in the manufacture of motor gasoline was identified since 2003. However, it was only with the present upgrade of the refinery and the demise of MTBE as an octane enhancer that this prospect is now being converted to a real business venture. After a period of negotiation, Petrotrin and Phoenix Park have been able to arrive at an agreement that satisfies our mutual expectations.

Signing of the Agreement

He added that this business venture was a win-win agreement that provided a strategic fit with PPGPL’s core business, enabling the company to reap the benefit of expanding its product base while providing Petrotrin with a more environmentally friendly product to replace MTBE for use in the production of gasoline. 

He concluded: “We … publicly recognise our business partners and NGC’s sister state enterprise, Petrotrin, and look forward to forging other mutually beneficial relationships in the future.”

Mr. Eugene Tiah, President of PPGPL commented that agreements and arrangements such as these would enable downstream development to the benefit of the energy industry and economy of Trinidad and Tobago. 

Petrotrin Executive Chairman Malcolm Jones lauded the agreement and elaborated on its importance. He said: “It gives me great pleasure to participate in this signing ceremony here today, as this occasion provides us with the opportunity to pause and reflect on the significance of the Isobutane Sales Agreement executed between PPGPL and Petrotrin.

Eugene Tiah

Alkylation Unit

This Isobutane Sales Agreement will see PPGPL supplying up to 3,500 barrels per day of Isobutane as feedstock for our new Alkylation Unit, which is scheduled to commence operation by mid-2009. Under the Agreement, Isobutane will be supplied to Petrotrin for a period of 15 years in the first instance.

A synergistic approach informed the commercial and operational model which culminated in this mutually acceptable arrangement for the supply of isobutane.

In recognition of PPGPL’s core business and its proven track record as a reliable and quality conscious gas processor, PPGPL will be responsible for the design and construction of the fractionator unit to separate mixed butanes into isobutane and normal butane. This fractionator unit will be located at PPGPL’s plant at Point Lisas.

Petrotrin will be responsible for the construction of a pipeline between PPGPL’s battery limit and our receiving facility at Pointe-a-Pierre, in order to take delivery of the product. 

The consuming plant for this isobutane is just one of several new major process units to be constructed at our Pointe-a-Pierre refinery complex over the next three years.  Those of you who follow developments in the domestic energy sector will surely be aware that we at Petrotrin have embarked on what is commonly referred to as the Gasoline Optimization Project or GOP.                                                                                          

This massive upgrade project, which is expected to cost US 850  million dollars, involves the design and construction of: 

• A new Isomerisation Unit
• Upgrade of the existing FCCU Unit
• A new Continuous Catalytic Regeneration (CCR) Platformer Complex
• An Alkylation Unit
• An Acid Plant
• Related Utilities and Offsites

Construction is in progress and the first unit, the Isomerisation unit, is scheduled for completion by the end of this year. 

The Gasoline Optimisation Project was conceptualised several years ago as a strategy that would allow the Pointe-a-Pierre refinery to produce more finished gasoline while complying with the more stringent fuel specifications demanded by the market. Alkylate from the new Alkylation unit is one of the most desirable components for blending such high quality gasoline.

Over the last few years, market forces have led to robust refining margins. We expect these refining margins to be sustained for some time to come and this clearly presents a window of opportunity for placing the refining operations at Pointe-a-Pierre on a sound footing.

With threats to our traditional markets looming in the horizon, particularly after the introduction of the Petrocaribe Initiative by Venezuela, completion of the GOP with increased production capacity of environmentally friendly fuel as well as increased flexibility to service new markets. The upgrade therefore underpins the competitive position of our refining operations going forward. 

In closing, may I take this opportunity on behalf of the Board and Management of Petrotrin to acknowledge the efforts of the representatives from both our companies in completing this Agreement.

We also look forward to the continued close collaboration during the construction and supply phases. I thank you.”