China Eximbank pledges export buyer's credit loan for Cienfuegos Refinery and LNG Terminal Expansion Project (linked to #40556)

On 5 June, 2010, a three-way letter of intent was signed between the Cuban-Venezuelan SPV, Cuvenpetrol (CUPET), China National Petroleum Corporation's Huanqiu Contracting and Engineering unit, and the Italian unit of French oilfield service company, Technip TECF.PA, for the Cienfuegos Refinery Expansion Project. Cuvenpetrol and Huanqui also signed a separate letter of intent that involves a contract to build a liquefied natural gas project, including a regasifcation plant built at or near the refinery. The expansion of Cuba's Cienfuegos oil refinery, the largest in the country, as well as the addition of a LNG terminal attachment are to be funded via a single loan from China Eximbank, with a sovereign guarantee of using Venezuelan oil as collateral. China Eximbank has agreed to finance 85% of the total cost of the project, which is reportedly $6 billion USD. This loan will be secured by China Export & Credit Insurance Corp. (SINOSURE); therefore the financing is likely export buyer's credits. The refinery has an estimated cost of $4.5 billion and the LNG terminal is expected to cost $1.3 billion The expansion will increase the refinery's capacity from 65,000 barrels per day to 150,000 barrels per day. The LNG (gas liquefaction) terminal will have the capacity to process 2 million tons of gas annually and also includes a 150 MW electricity generation plant. China National Petroleum Corporation (CNPC)'s Haunqiu Contracting and Engineering Corporation is the contractor for the expansion. Construction was expected to begin in 2011 and be completed in 2013. As of May 2014, the Chinese Government had delayed funding of the Cienfuegos expansion, arguing complications in their agreement with Venezuela The project is currently stopped. The formation of Cuvenpetrol, the SPV created in 2005 between Cubapetróleo (Cupet) and Petróleos de Venezuela SA (PDVSA) to run the Cienfuegos Refinery, is captured in #40556. However, on 14 December, 2017, Cuba took Venezuelan state oil-firm PDVSA’s 49% stake in the Cienfuegos Refinery as payment for debts Venezuela incurred. Since then, Cuba has had full ownership of the plant.

Additional details

One list reported loan as $4.93 billion, but this is not recorded elsewhere. The Chinese name of the Cienfuegos Refinery's letter of intent is 古巴西恩富戈斯炼厂项目总承包合同 (See: 中石油与古巴国家石油公司签署合作协议). The Chinese name of the LNG terminal's letter of intent is 古巴西恩富戈斯ＬＮＧ项目总承包合同 (See: 中石油与古巴国家石油公司签署合作协议). The Cienfuegos refinery was recommissioned in 2007 after PdV invested $236 million to complete and upgrade the plant (See: PdV out of Cuba refinery, Rosneft hovering). This is different from the amount listed in linked project #40556. Project status has been coded as Pipeline: Pledge, because China Eximbank only signed letters of intent rather than an official loan agreement.

Number of official sources

1

Number of total sources

23