Venezuela to Provide First $250 Million for Oil Refinery

November 23, 2007

MANAGUA – Venezuela is to provide $250 million toward the construction of an oil refinery, petrochemical plant and lowincome housing in Nicaragua, the head of Nicaragua’s state petroleum company said Nov. 16.

PETRONIC president Francisco López said that the funds would be administered by ALBANISA, a joint venture of the Nicaraguan enterprise and Venezuelan state-owned oil giant PDVSA.

“That is $250 million in this first stage, which implies the capacity for storage and distribution at the local level and even a little beyond our borders,” López said.

The Venezuelan-funded oil complex and housing development is to be built in Piedras Blancas, near Puerto Sandino on Nicaragua’s Pacific coast. Venezuelan President Hugo Chávez and Nicaragua’s Daniel Ortega laid the cornerstone for the refinery in a July 20 ceremony (NT, July 27).

The refinery will have the capacity to process 150,000 barrels per day of crude from Venezuela, one of the world’s 10 leading oil producers, converting Nicaragua into a net exporter of fuels and petroleum derivatives, ALBANISA says.

The Piedras Blancas project will cost $3.9 billion in all, López said.

ALBANISA is an outgrowth of the Bolivarian Alternative for the Americas, or ALBA, conceived by Chávez as an alternative to the now-moribund U.S. proposal for a Free-Trade Area of the Americas.

So far, ALBA includes only communist Cuba and leftist-ruled Nicaragua, Bolivia and Venezuela.

Petronic’s López said that so far this year, Venezuela has sold 1.5 million barrels of gasoline, diesel and fuel oil to Nicaragua for $135 million, a quarter of which is remitted to ALBANISA for projects in the Central American country.

 

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