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Chinese debt-ridden Guangdong Zhenrong taps private refiner for Caribbean project

January 17/2018

MOSCOW (MRC) -- China's debt-ridden Guangdong Zhenrong Energy (GZE) has asked a private refining group to join a multi-billion dollar investment in an aging Caribbean oil plant to shore up financing on the deal, reported Reuters with reference to two Chinese executives involved in the matter.

The Curacao government last week scrapped a preliminary deal with Guangdong Zhenrong to operate the century-old Isla refinery, saying the state-controlled commodity trader lacked the financial muscle for the job on its own.

Taking over the 335,000 barrels-per-day (bpd) refinery, operated for decades by Venezuela's cash-strapped state oil firm PDVSA, would give China a foothold in the Caribbean's second-largest refinery, which has also been a key transfer point for Venezuelan oil heading to Asia.

Chen Bingyan, Guangdong Zhenrong's chief negotiator for the project, acknowledged that the Chinese commodity trader is saddled with heavy debt after rapid expansion but said that should not stop it from pressing ahead on the investment.

"Guangdong Zhenrong is facing financial difficulties and it will take time to sort out those problems ... because of this, we've brought on a large private Chinese firm to join the project," Chen told Reuters.

Baota Petrochemical Group, a privately-run refining and petrochemical group in northern China, has emerged as the new partner in the Curacao project, which requires USD3.4 billion to revamp the aging oil plant.

"What's more important, Baota has obtained USD3 billion worth of financial support from the Asia Development & Investment Bank," Chen said.

Chen said the bank's offer of financial support will be valid until January 2019, and its release of loans will be subject to the involved parties signing a final commercial contract and obtaining regulatory approvals.

Set up in 2009, Kuala Lumpur-based Asia Development & Investment Bank (ADIB) was funded by China Development Bank and oil-producing nations such as Malaysia and Saudi Arabia. The bank manages a credit line of USD40 billion with a focus on energy investments, according to the bank's website.
Author:Margaret Volkova
Tags:crude and gaz condensate, petrochemistry, China.
Category:General News
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