QUITO – Ecuador expects China to provide all of the financing for the Refineria del Pacifico, a mega-refinery for processing crude and the largest public works project in the Andean country, President Rafael Correa said.
The massive project is being undertaken by state-owned Petroecuador and Venezuelan state-owned oil giant PDVSA.
“The Chinese are very interested in financing practically all of the refinery,” Correa said Saturday.
Strategic Industries Minister Jorge Glas flew to Beijing on Friday night to negotiate the financing agreements for the energy project, the president said.
Refineria del Pacifico, which will have the capacity to process 300,000 barrels per day (bpd) of crude, will allow Ecuador to meet domestic demand for gasoline and export the fuel to neighboring markets and Asia, especially China.
The president defended his policy of moving closer toward Beijing, arguing that China has “excess liquidity” and needs to expand its access to petroleum and petroleum derivatives for its fast-growing economy.
Ecuador, for its part, “has a surplus in hydrocarbons and a deficit in liquidity, like all poor countries,” making the deal mutually attractive, Correa said.
China “is providing us with financing and we are doing a long-term contract to send them (petroleum) derivative products,” the president said.
Correa defended his administration against opposition charges that Ecuador was becoming too dependent on Chinese capital.
“I’ll stop taking financing from China when the United States does so, because the country that keeps the United States going is called China, with its financing,” Correa said.
Ecuador expects Refineria del Pacifico, which will be built in the western coastal province of Manabi, will cost about $13 billion and be completed in 2016.
“We are planting for the future, for those who will come after us,” Correa said, adding that the largest investment project to date in Ecuador was the $2 billion Coca-Codo-Sinclaire hydroelectric power plant, the majority of whose financing came from China.
Oil is Ecuador’s main export product and revenues from its sale finance about 35 percent of government spending.