China's largest state-owned oil and gas company may invest in OPEC member's Pacifico refinery project.
China National Petroleum Corp (CNPC the nation's largest oil producer, is currently in talks with Central American nation Ecuador over a potential investment of $12.5 billion. The company is discussing becoming a shareholder in the Pacifico refinery complex, a joint venture run between Ecuador's state-run Petroecuador and Venezuala's PDVSA, which is expected to come online in late 2015.
The 300,000 barrels-per-day (bpd) refinery will cut Ecuador's fuel costs, which have remained consistently high due to a low domestic refining capacity. The OPEC nation's debt commitments to China already amount to around $7.3 billion, including advance payments for oil sales, loans and financing for energy projects.
China is already heavily invested in South and Central America. The developing nation doubled its credit terms to Venezuela to $8 billion, in addition to a separate $20 billion loan from the China Development Bank in 2010. On top of this, the prolific energy investors snapped up $17 billion in PDVSA (with whom PetroChina are developing a $9 billion refinery) bonds last year, as oil revenues continued to surge.
PetroChina, a subsidiary of CNPC, is also in negotiations to purchase Valero Energy's idle Aruba refinery, although for a substantially cheaper price of $350 million plus working capital.