April 28 (Bloomberg) -- Cuba continues moving forward with development of a $1.4 billion natural gas regasification project and a $1.2 billion urea and ammonia plant under a Venezuelan initiative to provide cheap fuel to regional allies.
The regasification project will have the capacity to process 2.06 million metric tons per year and consist of building facilities to receive and process liquefied natural gas, Petroleos de Venezuela SA said in a December report released last week. The aim of the project is to provide a clean and low-cost energy source to the population, the company said without giving a completion date.
The urea and ammonia plant will have the capacity to process 400,000 metric tons per year of urea and 370,000 metric tons per year of ammonia. The project seeks to benefit Cuba’s industrial sector, particularly plastics, industrial agriculture and chemical products, PDVSA said.
Output from the urea and ammonia plant will be destined to meet demand in Cuba while excess output will be exported by PDVSA’s petrochemical affiliate Pequiven to countries in Central America and the Caribbean. The project conceptualization phase has been finalized though no completion date was given.
Created by late Venezuelan President Hugo Chavez in 2005, the Petrocaribe Initiative lets its 18 member countries buy oil from PDVSA at market prices, paying 5 percent upfront and the remainder over 25 years at 1 percent interest.
PDVSA exported an average 103,400 barrels a day to Petrocaribe members in 2013 compared to 102,000 barrels a day in 2012, the company said. Cuba, under an accord with Venezuela, received 89,600 barrels per day in 2013 from PDVSA compared with 91,100 barrels per day in 2012.
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