Petrobras mulls Northeast Brazil refinery venture with Korea's GS Energy


SAO PAULO -- Brazil's state-controlled oil company Petrobras said Tuesday it is studying a possible joint venture with South Korean energy company GS Energy to build a refinery in northeastern Brazil.

Petrobras and GS Energy last month signed a letter of intent to study the creation of a joint venture to operate a premium-fuel refinery, Petrobras said in a regulatory filing. The companies didn't provide additional details, saying only that the agreement doesn't obligate either company to commit to any future investment or partnerships.

Last year, the governor of the state of Ceara, where the refinery could be built, met with GS Caltex to discuss a possible joint venture. GS Energy was spun off from GS Caltex in June of last year, according to the company's website.

Petrobras's plans to build the refinery, called Premium 2, have been pushed back to 2017 or 2018 as the company focuses its $237 billion investment plan through 2016 on boosting crude oil production and development of ultra-deepwater offshore fields.

Brazil currently suffers from a refining shortfall as domestic demand for fuels has outpaced refining capacity. Petrobras is in the process of expanding the country's refining profile, but the first of the already delayed new refineries isn't expected to be ready until 2014 at the earliest.

Premium 2 would have installed processing capacity of 300,000 bpd. The Premium 1 refinery, which is also forecast to start up in 2017 and 2018, would process about 600,000 bpd in Maranhao state. Petrobras is currently building two new refineries, Comperj in Rio de Janeiro state and Abreu e Lima in Pernambuco.

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