Oil Diplomacy Editor

LOS ANGELES, Oct. 13 -- Venezuela's state-owned Petroleos de Venezuela SA (PDVSA), aiming to process more of the country's heavy oil at home, has begun construction of the 100,000-b/d Santa Ines refinery, in the state of Barinas.

The refinery will help the country "achieve economic independence, financial independence as banks and stock markets in the US and Europe sink," said Venezuelan president Hugo Chavez. "Latin America has finally begun assuming its course," he said.

The complex, valued at some $1.2 billion, is being developed in two phases: the first is scheduled for completion in 2011 with an initial capacity of 30,000 b/d, while the second will be reached in 2014, bringing the plant to full capacity.

The facility will refine crude oil from Barinas and Apure states, as well as oil from the Orinoco heavy crude belt. It will produce regular and high-octane gasoline, LPG, diesel, kerosene, fuel oil, and asphalt.

Rafael Ramirez, who doubles as PDVSA president and Venezuelan energy minister, said the new refinery will refine mostly crude oil for the domestic market.

Santa Ines is one of four domestic refineries either under way or planned. The others include the 50,000-b/d Caripito refinery, a 200,000-b/d refinery in the state of Zulia, and a 400,000-b/d refinery at Cabruta.

In September, Chavez said his country and China plan to construct two refineries, one in each country. Chavez said the Venezuelan refinery will be built in the Orinoco basin (OGJ Online, Sept. 23, 2008).