The future of refining in Brazil: Meet the 5 refineries with ongoing projects that could lower the prices of gasoline, diesel and other petroleum products

At least 5 investment projects that add up to a billionaire amount are underway for the production of high quality oil derivatives

Who has never heard that Brazil is self-sufficient in oil? This brand comes from 2015, when the country started to produce the product more than it consumes. Even so, gasoline in Brazil is one of the most expensive in the world. The two main reasons for the above-average prices for this fuel are: Petrobras' policy of basing the value of oil on the international market and the need to import it, since there is not enough structure for refining around here.

It is through petroleum refining that the separation of its components occurs based on the difference in the range of boiling points of the fractions. It is in this process that a variety of derivatives such as gasoline, diesel oil, among others, are obtained.

It is in the refineries where the oil goes through this process until the creation of fuels. In Brazil, there are at least 14 units in operation, 3 of which have already been sold, 5 awaiting sale and 6 will continue to belong to Petrobras.

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All these are operating at their maximum capacity, considering the adequate production, safety, profitability and logistics conditions, but with inability to meet the demand for fuel in the country, therefore, there is a need to buy from abroad.

Currently gasoline is sold in Brazil for prices 15% above the average practiced in 170 countries, according to a survey carried out on the consultancy's website Global Petrol Prices. With regard to diesel, this will change from R$ 4,51 to R$ 4,91 per liter this Tuesday (10).

But what could Brazil do to be less dependent on oil imports and consequently lower the average price of these fuels? According to experts, some of the alternatives would be new projects or more investment in existing refineries.

Currently, there are at least 5 investment projects in refining that add up to more than US$ 6,1 billion through the 2022-2026 Strategic Plan of Petrobras, including the expansion of capacity derived from high quality oil, such as S-10 diesel, with low sulfur content. Below we will detail which works are in progress to leverage refining in Brazil

5 projects to leverage refining in Brazil

1. Completion of the second unit (train) of the Abreu e Lima Refinery: The works are part of Petrobras' 2022-2026 Strategic Plan. The project provides that after expanding the processing capacity of the refinery located in Pernambuco from 115 to 260 barrels of oil per day in 2027, increasing the production capacity of S-10 diesel by 95 barrels per day.
2.  Integration between the Duque de Caxias Refinery (Reduc) and the GasLub (Former Comperj) in Itaborai: The project has advanced to reach an additional capacity of 93 bpd of S-10 and QAV diesel, in addition to 12 bpd of higher quality lubricants.
3. New Replan unit: Work on this unit located in Paulínia, São Paulo, is scheduled to begin in 2022 and be completed by the end of 2025. The goal is to produce up to 10 cubic meters (m³) of S-10 diesel per day, expanding capacity. by Replan to 34 thousand m³/day.
4. Adaptations at the Duque de Caxias Refinery (Reduc): The unit will undergo renovations to expand production capacity and the quality of the diesel manufactured at the site. The completion of the work is scheduled for the second half of 2023. The production capacity of Diesel S-10 at Reduc should increase from the current 5.000 m³/day to 9.500 m³/day.
5. Revap modernization: At the Henrique Lage Refinery (Revap) located in São José dos Campos, São Paulo, works will also be carried out to adapt the diesel hydrotreatment unit. Project activities at the refinery are expected to be completed by December 2025.

Refining units in Brazil: which ones have already been sold and which ones are waiting to be purchased

As we mentioned above, of the 14 refineries that are currently operating, 3 have already been sold, 5 are awaiting sale and 6 will continue to belong to Petrobras:

Refineries already sold:

• Isaaque Sabbá in Manaus (AM) for the amount of R$ 994,15 million for the Atem group
• Landulpho Alves in São Francisco do Conde (BA) for US$ 1,8 billion to the Mubadala Capital group
• Shale Industrialization Unit in São Mateus do Sul (PR) for the amount of US$ 33 million to the F&M Resources group
• Potiguar Clara Camarão refinery in Guamaré (RN) for US$ 1,38 billion to the company 3R Potiguar SA, a subsidiary of 3R Petroleum Oil and Gas SA

Units waiting to be sold:

• Northeast Lubricants and Derivatives Refinery in Fortaleza (CE)
• Abreu e Lima refinery in Cabo de Santo Agostinho (PE)
• Gabriel Passos refinery between Betim and Ibirité (MG)
• Presidente Getúlio Vargas Refinery in Araucaria (PR)
• Alberto Pasqualini Refinery in Canoas (RS)

Units that will be maintained by Petrobras

• Paulínia Refinery (SP)
• Henrique Lage refinery in São José dos Campos (SP)
• Presidente Bernardes Refinery in Cubatão (SP)
• Capuava Refinery in Mauá (SP)
• Duque de Caxias Refinery (RJ)

Difficulty in refining oil coming from the pre-salt X refinery structure

Most of the Brazilian refineries were built in the 1970s. At that time, the oil used here in Brazil was imported, and only the light type. Then came the discovery and extraction of oil in the Campos Basin, so the refineries had to adapt to refine the Brazilian product, which is heavier.

From 2007 onwards, light oil also began to be obtained in Brazil due to the discovery of pre-salt reserves, but with different characteristics. Without the specific set of machines in the refineries to produce fuel from the light derivative, Brazil then started exporting it. Therefore, refineries designed to refine heavy oil and receive light oil could be a waste of resources.