Costa Rica, China eye $1 bln refinery deal
Sat Feb 6, 2010 8:47am IST
By Robert Campbell

SAN JOSE Costa Rica (Reuters) - Costa Rica and China's top state oil company CNPC are hammering out the details of a planned refinery upgrade that could cost up to $1 billion, the head of Costa Rica's national oil company said.

The project, which would triple the size of the Central American nation's only oil refinery by 2015, is likely to be approved by the two companies sometime in 2011 after further engineering studies are completed, Jose Desanti, the head of Costa Rican state oil refiner Recope, said on Friday.

"We're just a few weeks from bringing (the joint venture) to life," Desanti told Reuters in an interview. "We think it will be 14 to 18 months to give the green light to start the project," he added.

The deal with CNPC evolved out of conversations between the two companies when Costa Rica dropped its diplomatic recognition of Taiwan in favour of China in 2007.

In return for the switch, Beijing has already made low interest loans to the Central American nation and is building a soccer stadium in the capital San Jose.

Chinese oil companies have been expanding in the Americas as they seek to build up global businesses and secure new sources of supply for China's rapidly growing economy. CNPC has a long-standing interest in Venezuela and most recently Petrochina, a subsidiary of CNPC, took over a strategic oil storage terminal lease in the Netherlands Antilles.

However, China's entry into Costa Rica's energy sector is unlikely to provide it with access to new reserves for the foreseeable future as public opinion in the environmentally conscious nation is strongly opposed to oil drilling.

JOINT VENTURE

Recope, which is Costa Rica's monopoly oil refiner and distributor, has wanted to expand its existing 20,000 barrels per day refinery for some time to reduce its reliance on oil product imports, but has lacked the financial strength to do so on its own alongside other projects.

The refinery upgrade will be carried out by a 50-50 joint venture between Recope and CNPC that will then lease the plant back to Recope upon completion. The two sides hope to finance 70 percent of the cost of the upgrade.

"From feasibility studies, we estimate a range of $800 million to $1 billion," said Desanti.

Financing from the project is likely to be provided in part by China at "attractive terms," he added.

The expansion plan comes as global refining margins have fallen sharply, forcing the closure of several refineries in the United States and elsewhere. Recope is confident refining margins will recover in the medium term, Desanti said.

Recope is also working on a modernization of its terminal facilities in the Caribbean to allow it to receive tankers capable of carrying up to 80,000 tonnes of refined products.

A new crude oil loading monobuoy is also being studied.

China, Costa Rica ink free trade agreement
(Xinhua)
Updated: 2010-04-08 16:47

China and Costa Rica signed a Free Trade Agreement (FTA) in Beijing Thursday to remove trade barriers and enhance bilateral ties, the Ministry of Commerce announced in a statement on its website.

The agreement was the first free-trade pact inked between China and a Central American country, and would help both sides tap into each other's market, as well as other markets in Asia and Central America, it said.

The agreement was signed between Chinese Commerce Minister Chen Deming and his Costa Rican counterpart Marco Ruiz. The two sides hoped that the FTA could be implemented as early as the second half of this year.

The two countries would gradually lift tariffs off more than 90 percent of products traded between them once the FTA took effect.

The FTA also would open sectors for investment from the other side: 45 service sectors in Costa Rica, including telecommunications and real estate, and 7 sectors in China.

The tax reduction would benefit the trading of Chinese products such as textile materials, light industrial goods and machineries, as well as coffee, beef and fruit juice from Costa Rica, it said.

Costa Rica is now China's ninth largest trade partner in Latin America while China is Costa Rica's second largest trade partner.

Bilateral trade between China and Costa Rica reached $3.18 billion in 2009, compared with $2.89 billion in 2008, according to statistics from Chinese customs.

China and Costa Rica started the FTA talks in November 2008 and concluded the negotiations at their sixth round of talks in February this year.

China also has FTAs with Chile, Pakistan, New Zealand, Singapore, Peru and the Association of Southeast Asian Nations.

One other more direct Chinese spin off from the stadium construction is their involvement in at least one of the luxury high-rises going up around Parque Sabana. Although you would never guess it from their website, the Torres del Lago complex is a project of Chinafecc, a subsidiary of China's state-run Anhui Foreign Economic Construction Group.
http://www.torresdelago.com/english.html

haha It will take 100 Ticos to equal the work of 10 Chinos.... Is there an actual China Town of sorts established yet? I wouldn't mind checking around to find some roots and herbs if there is something like a Chinese bodega.

The morality part is what's so worrysome. The US will slowly (not for a long time but...) get edged out by China as the second-coming superpower. Now, the US is doing the same thing to expand our sphere of influence, especially in the middle east now. This is just part of the power play.