QUITO – The Ecuadorian government has signed an agreement with South Korean firm SK E&C for basic engineering studies at the Refinery of the Pacific, a joint project with Venezuela.
The petrochemical complex, which will be built in the Pacific coastal province of Manabi, is a project being carried out by Ecuadorian state-owned oil company Petroecuador and its Venezuelan counterpart, Petroleos de Venezuela S.A.
Ecuadorian President Rafael Correa, guest of honor at Friday’s signing ceremony, said that with this agreement “the biggest project in the country’s history is becoming a reality.”
The $260 million engineering deal was signed by the manager of the Refinery of the Pacific, Carlos Proaño; the president of Petroecuador, Luis Jaramillo; SK E&C’s legal counsel, Du Yong Choi; and the Asian company’s manager in Ecuador, Ky Ho Hang.
SK E&C Consultores Ecuador, with the backing of parent company SK Engineering and Construction Co. Ltd., is to carry out the basic engineering studies over a period of 18 months.
The South Korean firm also will conduct environmental baseline and conceptual engineering studies for the petrochemical complex, which is expected to come online in December 2013 with a 300,000-barrel-per-day capacity.
In his speech after the contract was signed, Correa said the refinery project will allow Ecuador to put an end “once and for all to the absurdity of exporting oil and importing derivatives.”
“A historic project is coming together,” Correa said, dismissing the “sterile” and “fundamentalist” criticism and debate surrounding the government’s oil policy and the refinery’s potential impact on the environment.
“It’s going to be a very important factor in (the country’s) development and source of employment,” the president said, adding that the project will be carried out with “maximum social and environmental responsibility and maximum efficiency.”
Correa also praised SK E&C as “the leading company in the sector.”
He said it “holds the world record for speed in refinery construction and has the world’s largest refinery. It’s a company with globally recognized reputation and prestige.”
More than $10 billion will be invested in the Refinery of the Pacific project, Correa said, “because it is not just a refinery” but also a petrochemical complex.
According to a statement from the presidential press office, “if the schedule continues to go to plan, expectations are for the construction stage of the project to begin in October of this year.”
The complex will meet Ecuador’s and other Latin American countries’ demand for gasoline, although, due to its geographic location, it is also expected to supply the Asian market.
Despite its status as South America’s fifth-largest oil producer, with output of 480,000 barrels per day, Ecuador is a net importer of gasoline and other derivatives.