A major Caribbean oil refinery is set to reopen.

CITGO Aruba and the Aruban government have executed a commercial agreement that will reopen one of the Caribbean’s largest oil refineries in San Nicolas, Aruba.

The signing ceremony for the agreement was held in Caracas with Aruban and Venezuelan officials on hand, including Venezuela President Nicolas Maduro and Aruba Prime Minister Mike Eman.

Operations at the Caribbean refinery had been idled since 2012; the new deal is for a 15-year lease agreement, with a 10-year extension option.

The refinery had previously been operated by Valero Energy Corporation.

Aruba Prime Minister Mike Eman with Venezuela President Nicolas Maduro

CITGO Aruba will operate the facility with CITGO Petroleum Corporation providing services to the group.

“This project will transform the refinery into an upgrader for Venezuelan extra-heavy crude within 18 months to two years. This process – which will require an investment ranging from $450 to $650 million, to be obtained from external financing sources – can be compared to a large turnaround. This is an area in which CITGO is well positioned to provide technical expertise and services,” said Nelson Martinez, CEO of CITGO Petroleum Corporation.

After an “adaptation” process, the facility will upgrade extra-heavy crude from the Orinoco Oil Belt, transforming it into intermediate crude.

That will then be sent to the CITGO refining network in the United States for further processing, according to the company.

“This is a very strong project from both the technical and financial perspective. It is a strategic partnership that will benefit CITGO Aruba, PDVSA, Venezuela and Aruba through operations that reduce costs in terms of transportation, energy and storage needs, fully utilize existing infrastructure and maximize the benefit of extra-heavy crude oil production from the Orinoco Oil Belt, the largest oil reservoir in the world,” Martínez said.