Ecuador Internacional

Ecuador’s refinery dream seems more of a fantasy: Fuel for Thought

Platts Blog 16/02/2016

Photo: Global Research

Photo: Global Research

It was supposed to be the biggest investment ever in Ecuador: $12 billion for a 300,000 b/d refinery and a kick-start to industrialization with a major petrochemical complex.

After $1.2 billion and eight years of broken promises, the Eloy Alfaro Refinery of the Pacific near Manta on the Pacific Coast is a vast empty lot cut from tropical dry forest.

Soon the area will be at the receiving end of a 93 km aqueduct that might supply potable water to nearby cities, but the refinery is a fast vanishing dream despite recent overtures with Iran.

Goaded into planning the mega-project by deceased Venezuelan President Hugo Chavez, his Ecuadorean peer, Rafael Correa, is once again touting the imminent closing of funding for the project. Last week, an Ecuadorean delegation talked with Iran about crude supplies and participation in the refinery.

But while Iran is happy to sell its fellow OPEC partner oil, it remains to be seen if the country will invest in Correa’s refinery plan. Particularly since Iran has many suitors from all corners of the world looking for potential refinery tie-ups.

It’s been a quixotic quest to fund the refinery. Initially, Ecuador expected PDVSA to help put up the cash, which never happened, and for the plant to go online in 2013. In 2009, Ecuador hired French investment bank Lazard. A year later, it was Japanese bank Mizuho. And the next year, an unnamed German investment bank.

The government finally signed a memorandum of understanding with CNPC and the Industrial and Commercial Bank of China in 2012 to seek funding. A year later, CNPC was to take a minority stake in the refinery, but that also never happened. CNPC pulled out, and even though Ecuador slashed the planned output by a third to 200,000 b/d, the $12 billion price tag remained the same.

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Fuente Original