UPDATE 2-Petrobras cleared to raise refinery output without controls
(Adds Petrobras comment in 6th paragraph)
By Marta Nogueira and Jeb Blount
RIO DE JANEIRO Jan 11 (Reuters) - Brazil's Petrobras received a license on Monday allowing it to boost crude processing by 35 percent at its controversial RNEST refinery, the local government said, a move that lets the company delay installation of promised pollution controls.
Under the license, Petroleo Brasileiro SA, as government-controlled Petrobras is formally known, can process up to 100,000 barrels a day of crude at the refinery, up from 74,000 barrels under the previous license, according to a statement from the environmental protection agency of Pernambuco, the Brazilian state where the refinery is located.
The license requires Petrobras to use a special low-sulfur crude blend instead of high-sulfur heavy crude from Brazil's Campos Basin near Rio de Janeiro that the refinery was designed to process.
The pollution-abatement systems initially ordered by the Pernambuco government were designed to reduce oxides of sulfur, nitrogen and other dangerous compounds and protect fragile environmental and tourist areas near the refinery.
Pernambuco did not state the blend's formulation and did not immediately respond to questions about the license.
Petrobras said in a statement that work on the pollution control system is 70 percent complete but halted. It plans a tender for its completion by July and has budgeted 756 million real ($186 million) for RNEST this year.
At $20 billion, five times the original budget, the RNEST, or "Abreu e Lima," refinery is probably the most expensive refinery ever built. Only one of two 115,000 barrel-a-day heavy-oil refining "trains" at the plant is operating. Continuación...