Guangdong Zhenrong Energy signs MoU with BP for Caribbean oil refinery

Chinese company Guangdong Zhenrong Energy has signed a memorandum of understanding (MoU) with BP that initiates commercial cooperation between the two parties for an oil refinery located in the Caribbean.

Guangdong Zhenrong is planning to improve the Isla refinery on the Caribbean island of Curacao.

The refinery is located 48km north-west of Venezuela.

The Chinese firm has also plans to construct a gas terminal at the site.

The cost of the whole project is estimated to be approximately $5.5bn, reported Reuters.

The project will strengthen China’s foothold in North America, which is a strategic hub of energy sector.

Under the MoU, BP will provide 335,000 barrels of crude oil per day to the refinery and in return, BP will take all refined fuel from the plant.

According to an official from Guangdong Zhenrong Energy, BP’s role is subject to parties agreeing on commercial terms.

Guangdong Zhenrong senior advisor Chen Bingyan was quoted by the news agency as saying: “BP has an established network in fuel marketing in the Americas.”

He also said that the Chinese company could work with the Venezuela's state oil firm PDVSA as a crude oil supplier.

China is a major importer of oil from Venezuela.

PDVSA has operated the Isla refinery for several decades under a lease agreement. However, it could not modernise the plant and meet the Curacao's requests due to its financial constraints.

Guangdong Zhenrong Energy intends to acquire the Curaçao oil refinery after 2019, reported Curacaochronicle.com.