Reficar Cartagena Refinery Expansion, Colombia - EKN

1 Introduction
1101335.000 04F1 0611 MJ21
1
June 21, 2011
The Cartagena Refinery is owned by Refinería de Cartagena S.A. (“Reficar”), a Colombian
special-purpose company owned by Andean Chemicals (50.9%), Ecopetrol S.A. (48.9%), and
minority shareholders (0.2%). The refinery is located on the northern coast of Colombia, just
south of the city of Cartagena. Reficar intends to modernize the refinery and expand its refining
capacity from 80,000 to 165,000 bpd (the “Project”). The modernization of the refinery will
include an increase in the facility’s complexity, which will enable it to process a less expensive
mix of crude (heavier, more acid) while producing low-sulfur gasoline and ultra-low-sulfur
diesel that will meet new domestic and international clean-fuel requirements (e.g., sulfur content
for the domestic market: not higher than 300 ppm for gasoline and 50 ppm for diesel, and for
the export market: < 30 ppm for gasoline and < 8 ppm for diesel). The new configuration,
including hydrocracking, hydrotreating, catalytic reforming, and coking capacity, will enable
the refinery to handle up to 90,000 bpd of acidic crudes. This will provide a competitive
advantage because most refineries can process only small quantities of such corrosive crude
oils, and will allow Colombia to better use its domestic oil reserves. The new products will
include low-sulfur gasoline, jet fuel, and ultra-low sulfur diesel.
The investment plan has an estimated capital cost of US$4.7 billion. The debt financing
structure considered for the upgrade program includes a Direct Loan and/or Loan Guarantee
structure provided by three export credit agencies (US Ex-Im Bank, EKN, and SACE, the
“Senior Lenders”) up to US$2.95 billion (Tranche 1), and up to US$300 million (Tranche 2),
which is expected to be provided by domestic and/or international commercial banks.
Exponent was contracted to act as the Independent Environmental and Social Consultant for the
Senior Lenders to the Project. This work was initially reported in Exponent’s Environmental
and Social Due Diligence report (Exponent April 2009). The scope of work for this updated
Environmental and Social Due Diligence report consisted of four tasks: