Latin American Refinery Boom: Dos Bocas an Cuba Projects Reshape Caribbean Fuel Market
Mexico Dos Bocas refinery an Cuba Cienfuegos expansion add over 450,000 bpd of capacity, changin di competitive landscape fi Petrojam an di Caribbean downstream sector.
Latin American refinery capacity a expand at di fastest pace in two decades, led by Mexico Dos Bocas (Olmeca) refinery an di rehabilitation of Cuba Cienfuegos facility. Combined, di projects add over 450,000 barrels per day (bpd) of capacity, wid significant implications fi di Caribbean fuel trade an Jamaica Petrojam refinery.
Dos Bocas, located in Paraiso, Tabasco, finally a reach commercial operation after years of delay an cost overruns. Originally budgeted at US$8 billion, di final cost a estimated at US$17 billion. Pemex confirm di refinery a process 180,000 bpd as of November, wid di target of 340,000 bpd by mid-2026. Configuration include atmospheric an vacuum distillation, a 90,000 bpd coker, hydrotreaters an a catalytic reformer, allowing yield of roun 60% gasoline, 25% diesel an 15% other products. President Claudia Sheinbaum continue di Lopez Obrador-era policy of fuel self-sufficiency, an Pemex aim fi reduce gasoline imports from di US Gulf Coast by 60% by 2027.
In Cuba, di Cienfuegos refinery originally built by di Soviet Union an reactivated wid Venezuelan investment in 2007 a undergoing a US$1.1 billion expansion in partnership wid Russian state-controlled Rosneft. Capacity will rise from 65,000 bpd to 150,000 bpd, an di facility will receive Russian crude through di Mariel deep-water port. Di project complicate by US sanctions, an Western insurance an shippin services largely unavailable, but Russian an Chinese counterparties continue fi facilitate transactions through alternative banking channels.
Fi Jamaica Petrojam, dis development cut both ways. On one hand, increased Mexican refinin capacity reduce di availability of Maya an Isthmus crude fi export, since Pemex a prioritise domestic processin. Petrojam may need fi diversify im crude slate further toward Colombian Vasconia, Brazilian Buzios an even US WTI Midland. On di other hand, regional product supply will increase, potentially capping wholesale margins fi Petrojam gasoline an diesel sales to JPS an local marketers.
Di Caribbean downstream landscape also include di Aruba refinery (CITGO ownership, currently mothballed but under reactivation study), Curacao Isla refinery (under transition from PDVSA to a new operator), Trinidad Pointe-a-Pierre (closed since 2018, refurbishment plans under evaluation), an di Dominican Republic Refidomsa. Total Caribbean refinin capacity, if all projects come online, could reach 1.2 million bpd by 2028, up from roun 600,000 bpd today. Di question of whether di market can absorb dis capacity, given di structural decline in gasoline demand by 2030, remain open.
Fi Jamaica energy security, di Petrojam upgrade decision become more urgent. Di refinery 35,000 bpd capacity an im ageing topping configuration limit profitability, an investments in a vacuum unit an a small coker could improve crude flexibility an product yield. Di estimated cost of US$240 million face competition fi capital wid renewables an grid modernisation. Government an unions a debate di best path forward, wid some advocatin a partial privatisation or strategic partnership.
Cuba situation also affect Jamaica through informal product flows an di occasional fuel shortage weh push Cuban demand toward Caribbean spot markets. Di Cienfuegos expansion should ease dis pressure by 2027, providin some stability fi regional balances.