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Latin America Investment News on Viva Tropical

China to Build $6 Billion Venezuelan Oil Refinery Project in Nicaragua

Article Summary:

China Engineering Compan Limited was tapped by the government of Nicaragua to build a Venezuelan-sponosored oil refinery in Nicaragua. In the first stages the refinery will invest $233 million, but the total works will cost about $6 billion, according to representatives of Albanisa.

Photo Credit: El Financiero

Original Article Text From El Financiero via Google Translate :

Green light for ALBA refinery

The oil refinery built by the Government of Nicaragua together with Venezuela in the Pacific Central American country, will produce a transformation in economic, considered independent economists, after signing the contract implementing the first stage of the work carried out by a China firm.

China CAMC Engineering Company Co., Ltd. (Camce) a few days ago signed a memorandum of understanding with the ALBA in Nicaragua (Albanisa) to build the first phase of the refinery to be named after Simon Bolivar. The project which was criticized by political and economic sectors of Nicaragua, who considered unfeasible, especially for the high amount of investment.

Albanisa is a unique joint venture and Venezuela, created in 2007 under the cooperation agreement of ALBA (body involving Venezuela, Cuba, Nicaragua, Ecuador, Bolivia and other countries), and is promoted by Venezuelan President Hugo Chavez.

In the first stage of the refinery will invest $ 233 million, but the whole work will cost about $ 6,000 million, according to representatives of Albanisa.

At first, the Venezuelan president had put the investment at $ 4,000 million. According to project plans, $ 183 million will go to the terminal where it will be the storage tanks of gasoline, diesel , bunker, gas and jet fuel. Another $ 50,000 will be used to install additional underground pipe going to the sea buoy, where ships discharged oil.

Both contracts were signed in Managua by Vice Albanisa, Francisco Lopez, and Vice President of Camce, Shen Wei.Francisco Lopez, vice president of Albanisa said already surpassed the stage of prefeasibility and feasibility studies, and in May last comienzarían construction of the work, to be located in the Miramar area, in the municipality of Nagarote, department Leon.

After signing the contract, Shen Wei, vice president of Camce, said the first phase of construction completed in 20 months and that the construction used the latest technology.

China Experience
The company’s Web site notes that China has deep experience in managing international projects, with a presence in Southeast Asia, South Asia, Central Asia, Middle East, Africa, South America and the Caribbean.

Projects include transportation, municipal engineering, irrigation, energy, construction materials, food processing, textiles, telecommunications, petrochemical, agricultural machinery, construction equipment, among others.

Social and economic impact
$ 6,000million is the estimated total investment for the refinery to be built in Nicaragua.

Francisco Lopez, vice president of Albanisa, highlighted the great social impact of the project to generate about 600 direct jobs and about 1,800 indirect jobs. Moreover, once in operation, staff will be 170 workers.

Nicaraguan economist Roger Cerda, a lecturer at Harvard University, said that once installed the oil terminal, Nicaragua will be doubling its storage capacity, because it currently can recepcionar a million barrels a day.”A refinery of this size would produce a transformation of the country, creating jobs, expanding production and exports, and branding work best in our class. Also allow a better distribution and availability of oil, “said Roger Cerda.

Meanwhile, Rene Vallecillo, also an economist, said it is clear that a project of this magnitude will focus largely for export to Central America and elsewhere.

However, considered to be analyzed the chances of success, taking into account competitiveness, since there are at least two similar projects in the region, Costa Rica and Panama.

“Three refineries in the region seems quite complicated. Will have to look elsewhere to supply or exit the market, “Vallecillo said.

Project data
More than 30,000 barrels of oil per day on average consumes Nicaragua, according to the Nicaraguan Energy Institute (INE).The refinery after Simon Bolivar will be able to refine 150,000 barrels of oil a day, of which Nicaragua will export more than 100,000 to Central America.

The terminal of the refinery will have capacity to store 1,080,000 barrels between diesel , gasoline, bunker and gas.

The project will generate 600 direct jobs and 1,800 indirect jobs in construction phase and 170 employees when operating.

For the construction of the first stage of the refinery, is expected to arrive between 250 and 300 Chinese technicians, who will have their own citadel, which is being conditioned by Albanisa, as reported by local media.

Link to Original Article:

From El Financiero

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