CNPC agrees to fund Ecuadorean oil project

China National Petroleum Corp has agreed to help finance the construction of a US$12 billion refinery project in Ecuador, the South American country's government said on Saturday.

Ecuador has been in talks with China's biggest oil producer for a year about funding the 300,000 barrel-per-day Pacifico project, which aims to start output in 2017 and is a joint venture between Ecuador and Venezuelan state oil company PDVSA.

"We've worked to have a third partner ... and this third partner will be no one more and no one less than the biggest oil company in the world, China's CNPC," Ecuadorean Vice President Jorge Glas said in a televised weekly government report.

He said the refinery project was progressing well.

"Above all, we've advanced a lot in the realization of investments, and they comprise capital contributions from the (original) partners and the new partner," Glas said.

The vice president did not give more details of the project, nor of its funding.

State-run Petroecuador has a 51 percent stake in Pacifico, and PDVSA holds the rest. Both companies have agreed to come up with 30 percent of the necessary financing, while the remainder is being sought from external partners.

The government in Quito has said construction is in its first phase and that the project is 21 percent complete.

The refinery is intended to cut domestic fuel costs for Ecuador, the smallest member of OPEC, which pumps about 500,000 barrels of crude per day but has to import oil products because of its low refining capacity.

In May, President Rafael Correa named Pedro Merizalde - formerly head of the Pacifico project - as his new oil minister.

A year ago, a Chinese industry source familiar with the matter said CNPC had asked the Industrial and Commercial Bank of China, the country's largest lender, to provide financing for its potential investment in Pacifico.