29/01/2010

ENAP and PETROECUADOR complement products exchange contract

Rodrigo Azócar and Luis Jaramillo

 

Within the framework of its new commercial policy, ENAP took a further step forward with the signing of an addendum or complement to the products exchange contract with PETROECUADOR.

The agreement was signed at the head office by ENAP’s chief executive officer, Azócar, and the executive president of PETROECUADOR, Admiral Luis Jaramillo, and will permit the viability of the exchange of products (gasoline, diesel and crude oil) between both companies.

ENAP will thus ensure an oil supply of an especially advantageous quality for its refineries’ processes.

Rodrigo Azócar was accompanied on this occasion by the R&L Division manager, Carlos Cabeza, the E&P Division manager, Nelson Muñoz, the manager of Enap Sipetrol Ecuador, Eduardo Tapia and the sales manager, Patricio Vidiella.

Following the signing, ENAP’s chief executive said that “I am very happy and satisfied because this perfecting of the contract signed in Quito last July is a powerful signal that we want to do more business in the future in order to adapt ourselves to the needs of both Chile and Ecuador”.

He added that “even though the navy will soon cease to manage PETROECUADOR, this prestigious company will continue having a strong link with ENAP, as the President of the Republic of Ecuador, Rafael Correa, is informed about the goodwill and collaboration existing between both companies that permit the advancement and consolidation of the integration between Ecuador and Chile”.

ENAP’s top executive recalled that “when we signed the original contract in July in Quito, we had been discussing this for ten years and, with due modesty, I can say that if in some way we, the admiral and I, have influenced it, it is in the drive and strength which we have devoted to achieving this”.

For his part, the executive president of PETROECUADOR, Admiral Luis Jaramillo, said that for his company it is a great honor to perfect this commercial agreement and maintain a relationship in this area with ENAP. “I especially thank Rodrigo Azócar and his team for the attitude and pro-active stance they have always had towards our company. You notice when people love their country and wish to do things thinking of the common good, caring and projecting their company”.

Luis Jaramillo added that “I am convinced that these good commercial relations will last over time and continue to give satisfaction to Chile and Ecuador. We have signed these contracts in the conviction that ENAP is a company of excellence and that it is a motive for pride for all Chileans”.

At the end of the ceremony, Luis Jaramillo presented a gift to ENAP’s chief executive, saying that “I do so as a sign of recognition of this Chilean state entity and of this leader who is a great man, representing the Chilean people”, he said with reference to Rodrigo Azócar.

ENAP has a good positioning in Ecuador, with a presence in that country since 2003 through its subsidiary Enap Sipetrol. There are also significant achievements like the commercial agreement signed with PETROECUADOR in Quito in July last year and the products exchange agreement signed by the two companies on September 21, 2009 in Santiago.

Visits to Bio Bio Refinery and the Second Navy Zone

Words of praise for Chile and especially for ENAP’s men and women workers were offered by Admiral Luis Jaramillo on concluding a visit to the facilities of the Bio Bio refinery, accompanied by the chief executive, Rodrigo Azócar.

The executive president of PETROECUADOR arrived in the Eighth Region accompanied by a delegation of officers of the Equadorian navy, Mauricio Alvear, Jaime Vela and Juan Liger, while ENAP was represented by the R&L Division manager, Carlos Cabeza, the Bío Bío refinery manager, Alfonso Yáñez, the manager of Enap Sipetrol Ecuador, Eduardo Tapia, and the director of corporate affairs, Pedro Urzúa.

On this occasion, Rodrigo Azócar recalled that the signing of the crude purchase contract between the companies in July 2009 was a landmark that marked a substantial advance in the relations between ENAP and PETROECUADOR. “Both companies have spent between 10 and 15 years trying to complete this business which today is ENAP’s only long-term contract containing a reference price, which is extremely useful if we consider that we now bringing two, and sometimes three, tankers of crude from Ecuador. This is a heavy crude and has characteristics that are very convenient for processing in our refineries”.

Rodrigo Azócar added that “we believe there are other businesses we can do with Ecuador. In fact, we have proposals for them to work on Block 40 in the Gulf of Guayaquil, and we are looking at various other joint business possibilities of mutual benefit which we hope to carry out in the near future”.

Luis Jaramillo recognized that “we have worked hard for this energy brotherhood to become reality and I sincerely think that what in the past was just a philosophy written on paper, is now a complete reality. With ENAP, PETROECUADOR has found the best strategic ally it could have and I think, without any doubts, that the objectives we have prepared will come to a happy ending”.

The manager of Bio Bio refinery, Alfonso Yánez, provided details about this ENAP subsidiary, its refining capacity, its production processes, forms of crude supplies, delivery of products, quality of the fuels, etc.

During the visit, the Equadorian delegation showed great interest in the process that Petropower is developing in the complex, whose installations were seen on site, which include coker, hydro-treatment and co-generation units.

The coker plant enables the transformation of pitch from the heaviest crudes into liquid fuels (diesel and naphtha) and gas fuels (fuel gas), leaving as by-products petro-coke and gas oil.

Products like naphtha and diesel are processed in the hydro-treatment unit which reduces the sulfur content, and the gas oil generated is fed into the catalytic cracking unit.

“Using these processes, the coke produced is used as raw material in a steam and electricity co-generating plant and serves to cover the supply requirements of the refinery, while also leaving a surplus which is sold on Chile’s Central Electricity Grid”, said Alfonso Yáñez.

Carlos Cabeza explained that “the bottoms of the heavy crudes are used to the maximum because they transform fuel into a more valuable and high-quality product like diesel and gasoline which today are very important businesses for the refineries”

Coincidentally, ENAP’s chief executive said that “ENAP’s refineries have made large investments in order to provide high-quality and environmentally-cleaner products. Both Aconcagua and Bio Bio are complex refineries that have been growing and incorporating technology to produce world-quality fuels. To comply with a requirement to produce diesel with 50 parts per million of sulfur throughout the country has forced our refineries to become increasingly more sophisticated, and this is a matter that we have done very well”.

In the same context, the representatives of PETROCUADOR and ENAP shared some experiences common to the refineries of both companies, such as the familiarity of residents with their installations and the priority nature of safety and risk prevention, and strategic management matters, agreeing to promote the exchange of experiences in these and other matters for their mutual benefit.

Before visiting the Bio Bio refinery, a visit was made to the installations of the Second Navy Zone in Talcahuano, including meetings between senior Chilean and Ecuadorian naval officers, plus a visit to Asmar and its shipyards.

Santiago-Hualpén, January 2010.