* Capacity capped at 45,000 barrels/day on pollution concern
* Higher limit only allowed if pollution equipment works
* Significant diesel output unlikely until 2015 -source (adds details, quotes from CPRH president)
By Jeb Blount and Marta Nogueira
RIO DE JANEIRO, Nov 3 (Reuters) - Brazil’s state-run oil company, Petroleo Brasileiro SA, received a license to start operating its long-delayed and over-budget RNEST, or “Abreu e Lima,” refinery in the northeast of the country, the Pernambuco-state environmental agency said on Monday.
The license limits RNEST to 45,000 barrels a day (bpd) of crude capacity at the first of two planned 115,000 bpd processing “trains.” The oil used will have to be of a relatively high grade and contain very little sulfur.
The CPRH, the environmental authority in Brazil’s Pernambuco state, wants to be sure equipment to control oxides of sulfur, carbon, nitrogen and other toxic emissions are working properly before allowing an increase in production or the use of heavier and dirtier crude oil.
And even if it starts up this month, RNEST is unlikely to deliver fuel to the Brazilian market until early 2015, four years behind schedule, according to a fuel-market source with direct knowledge of fuel-distribution plans at Petrobras, as the oil company is known.
Further delays and the license’s processing limits on the nearly $20 billion heavy-crude refinery will slow Petrobras’ planned reduction of money-losing diesel imports, helping bolster demand in the Atlantic Basin fuels market.
“There is no real timetable here,” Paulo Teixeira de Farias, president of CPRH, told Reuters by phone. “Petrobras will have to meet the atmospheric pollution-control provisions or they won’t get more capacity.”
Reducing dependence on imports is crucial for Petrobras. Brazil’s government has not allowed the company to raise domestic fuel prices in line with international prices, forcing the company to sell imports at home at a loss.
Losses on imports of diesel and gasoline have crimped cash needed for the company’s $231 billion, five-year expansion plan, helping make Petrobras the world’s most-indebted and least-profitable major oil company.
Petrobras officials did not respond to requests for comment.
RNEST was supposed to start its first 115,000 barrel-a-day refining unit this week. Union officials representing workers at the plant, said that delays in the license mean that the refinery is unlikely to start operations until sometime in December.
The complex logistics of delivering crude to the plant by ship and then shipping the fuels produced to distributors on Brazil’s northeast coast means it will be some time before output reaches consumers, the fuel-market source said.
Under Petrobras’ unified order system, distributors must place their fuel requests for December by Wednesday, the source said. As Petrobras has yet to inform those distributors of any potential fuel coming from RNEST, sales from RNEST are unlikely until January at the earliest, the source added.
RNEST is expected to start its second 115,000 barrel a day refining train sometime in mid-2015.
Union officials told Reuters they also expect the opening of the second train to be delayed, perhaps until the end of 2015. (Reporting by Jeb Blount and Marta Nogueira; Editing by Diane Craft and Alan Crosby)