St Kitts benefits from PetroCaribe deal

BASSETERRE, St Kitts (CMC):

ST KITTS AND Nevis Tuesday took control of a new 6,000-barrel storage tank under the Venezuela-led PetroCaribe initiative that local officials said would help improve the Federation's trading capabilities.

Permanent secretary in the ministry of energy, Oaklyn Peets, said the Needsmust Power Station, which uses more than 700 barrels of fuel daily at a monthly cost of more than five million EC (Eastern Caribbean) dollars (US$1.85 million) would benefit tremendously as a result of the new initiative.

"An increase in the storage capacity is necessary, given the disruptions to trade in supplies, especially during the hurricane season when rough seas prevent shipping of gas oil to the various countries," said Peets, adding that the fuel tank represents an enduring commitment between the St Kitts and Nevis and Venezuela.

Beneficial energy policies

"This fuel tank which is being handed to the ministry of energy is an integral part of the framework of the PetroCaribe agreement. This is designed to provide a platform for the development of energy policies that would directly benefit the people of St Kitts and Nevis," he said.

Peets said that the government is the largest consumer of fuel on the island but has the least amount of storage capacity.

He said the construction of the tank began two years ago, after a period of lengthy discussion and negotiation between all parties, and that the objective of the government is to have sufficient storage facilities on the island.

"In the not-too-distant future, PDV St Kitts Energy Ltd will proceed to construct premises to accommodate six additional tanks to augment existing supplies.

"This proposed development will do much to improve our capacity and reduce vulnerability. As the power station expands, the need for additional storage becomes more and more acute. As the generating capacity increases, so does the storage capacity, both of which are contingent upon increasing demands from the general consuming public," said Peets.

Under the PetroCaribe initiative launched in 2005, several Caribbean countries purchase oil from Caracas on conditions of preferential payment.

The payment system allows for the purchase of oil on market value, but only a certain amount is needed up front. The remainder can be paid through a 25-year financing agreement at a low interest rate.

The deal allows Caribbean countries to purchase up to 185,000 barrels of oil daily. In addition, it allows them to pay part of the cost with other pro-ducts such as bananas, rice and sugar.