Venezuela, China build 125,000 bpd orimulsion plant

www.forbes.com Reuters, 02.17.03, 5:32 PM ET

CARACAS, Venezuela, Feb 17 (Reuters) - Venezuelan state oil firm PDVSA has begun construction of a 125,000 barrel per day plant to process orimulsion boiler fuel for export to China, tapping an initial investment of $360 million, PDVSA said on Monday. The construction follows a 2001 supply contract lasting 33 years between China National Petroleum (CNPC), parent of PetroChina <0857.HK> (nyse: PTR - news - people), and Venezuela's PDVSA. CNPC owns a 40 percent stake and PetroChina owns a 30 percent share of the contract. PDVSA owns the remaining 30 percent. Construction of the plant is slated to be finished by next year. The ground breaking came as Venezuela, the world's No. 5 oil exporter, struggles to restore its petroleum industry to pre-strike levels after a work stoppage started on Dec. 2. Orimulsion, a mixture of 70 percent extra heavy crude oil and 30 percent water, is produced in Venezuela and used for direct burning in power plants. PDVSA said in a statement the plant was being constructed in Anzoategui state. It would generate state income of $2.2 billion in the first 20 years of operations.