China May Spend $700 Million on Costa Rica Refinery
November 19th, 2009 | by admin |China may spend $700 million to help fund expansion of Costa Rica’s Refinadora Costarricense de Petroleo SA oil refinery as it boosts energy ties in the region.
China National Petroleum Corp. may tap a China state-run bank for financing to triple capacity at the plant to 60,000 barrels a day, Jose Leon Desanti, head of the Costa Rican refining company, known as Recope, said in an interview. The Chinese company, known as CNPC, is a partner in the expansion.
“CNPC is doing some work to identify the possible bank or banks in China,” Desanti said from San Jose, the Costa Rican capital, on Nov. 13.
China and Costa Rica may also hold talks within three years for the development of a separate refinery with capacity of 300,000 barrels a day to handle crude from Latin American producers for export, according to Desanti. The Asian nation is strengthening ties with commodities producers from Africa to Latin America to ensure supplies of energy and metals, said Pedro Tuesta, senior Latin American economist at 4Cast Inc.
“It’s a long-term strategy,” he said today in a telephone interview from Washington D.C. China “is setting up infrastructure for long-term supplies,” he said.
A unit of CNPC may also help on the construction of the refinery expansion near the city of Moin, according to Desanti.
Costa Rica, a nation of about 4.3 million people with ports on the Caribbean and Pacific coasts, seeks to cut dependence on imported gasoline. The refinery expansion will boost output from about 18,000 barrels a day at Recope.
‘Launching Pad’
China is seeking to strengthen political ties with the region, Juan Lindau, a political scientist specializing in Latin America at Colorado College, Colorado Springs, said today in an e-mail. The two nations also are negotiating a trade accord.
“China sees Costa Rica as a launching pad for all of its economic interests in Central America, not to speak of the more general vicinity,” he said. “China is boundlessly interested in Latin America’s resources.”
Construction on the expansion at the refinery in eastern Costa Rica may begin in 2011 or 2012 and finish by 2015, Desanti said. Recope began discussing the project with CNPC in 2007 and completed approvals for the plan last month.
CNPC Unit
The venture, signed with CNPC’s international unit, will cut energy costs when oil prices rise, Costa Rica’s government said in September. Oil has surged 77 percent this year.
A second, larger plant would help to ensure future growth in fuel demand by Costa Rica, which produces no oil of its own, Desanti said. The country has to make an “extra effort” to improve infrastructure, he said.
