China recently agreed to provide $10 billion in funding to the massive Pacific refinery project currently underway in Ecuador. The Refineria del Pacifico is a mega-refinery for processing crude and the largest public works project in the country.

The details of the deal include that the Industrial and Commercial Bank of China will fund 70 percent of the refinery and state oil giant China National Petroleum Corp (CNPC) also known as PetroChina will partner in the deal with Petroecuador and Venezuela's PDVSA.

Both Petroecuador and Venezuela's Petróleos de Venezuela are state owned and currently have a 51 percent and 49 percent stake in the project respectively.  

Exactly how it will be divided is not yet clear but CNPC will be worked in to have a 30 percent share by the time the deal is finalized. Deputy minister for strategic industries Augusto Espin said that the deal is set to be completed towards the end of March.

"We have the paperwork quite far along, and we are working on the documents to have CNPC in on the Refinery of the Pacific," he said. The final documents will then be submitted to all involved parties for final approval. He also mentioned a completion date of 2017.

President Rafael Correa made the announcement last week during Vice-President Jorge Glas' trip to China. He told foreign press that it was "practically a done deal" and that it is "tremendous news for the nation".

The refinery project is expected to cut domestic fuel costs for Ecuador. Although Ecuador is a member of the Organization of Petroleum Exporting Countries, it is the smallest, pumping 500,000 barrels of crude a day. Because it does not have refining capabilities Ecuador actually needs to import oil products.

Deputy minister for strategic industries Augusto Espin said that the deal is set to be completed towards the end of March.

Vice-president of Ecuador Jorge Glas concluded his visit to China on January 24. During his visit Glas met with China's Vice-President Li Yuanchao and other leaders, all the while stressing the spirit of cooperation between the two countries, saying that Ecuador has been paving the way to work with China for some time.

Ecuador will also soon allow visa free services for Chinese tourists making travel between the countries far smoother. Glas lauded China's knowledge and resources and said repeatedly that he looked forward to working with CNPC and other Chinese businesses in the future and he hopes for far more investment from the country in addition to this latest. Glas' last official stop on his tour was at a steel factory in Tianjin.

Glas stressed that this is not a one sided relationship. In an interview with news agency Prensa Latina, Glas called China a country with the technology, expertise and financial resources required by Ecuador to achieve industrialization. Though China has a lot to give, Ecuador, for its part, has non-renewable natural resources that China needs to continue its steady pace of development, he said.

Ecuador "has a surplus in hydrocarbons and a deficit in liquidity, like all poor countries," making the deal mutually attractive", Correa told the Latin American Herald Tribune.

"We developing countries of course need financing, and China is the world's leading financier, even to the United States," Correa said.

Ecuador is also looking to use the refinery to spread the wealth. With it they aim to increase domestic oil production, stop the import of oil for domestic consumption and place the surplus in markets such as Peru, Chile and some Central American countries.

Eliana Kirshenblat in New York contributed to the story and can be reached at elianakirshenblat@chinadailyusa.com