OREANDA-NEWS. June 03, 2014. After about three years of negotiations, the government of Ecuador is preparing to sign a financing deal with China, valued at about USD 7 billion, to finance a new oil refinery known as the Refineria del Pacifico, an official said.

The USD 10 billion refinery will process 200,000 barrels of crude oil a day.

Thirty percent of the funds needed will come from the project's partners and the remaining 70% will be financed by a group of Chinese banks headed by the Industrial & Commercial Bank of China Ltd.

An official close to the deal, who asked not to be named, said Friday that the government of Ecuador will sign the financing deal, the first tranche of which will consist of about USD 2.5 billion and will be disbursed soon.

The official said a high-level delegation of officials from China have been finalizing details in Quito, and President Rafael Correa will announce the deal Saturday during his speech to the nation.

Another person close to the negotiations said the remaining USD 4.5 billion from the loan will arrive in a second tranche, probably in 2015 or 2016.

The manager of Refineria del Pacifico project declined to comment.

Originally the refinery was a joint project between state-owned Petroecuador and its Venezuelan counterpart, Petroleos de Venezuela, or PdVSA.

As part of the deal, China National Petroleum Corp, or CNPC, will take 30% in the project, and PdVSA will reduce its participation to 19% while Petroecuador will retain 51%.

Initially the refinery was budgeted at USD 12 billion with an aim to process 300,000 barrels of crude oil a day, but last year the Ecuadorean government decided to build it in two stages, the first to process 200,000 barrels.

Currently, Ecuador produces about 550,000 barrels of crude oil a day and hopes to expand this to about 755,000 barrels a day in 2018, when the Ishpingo-Tambococha-Tiputini oil block will be producing a peak of about 200,000 barrels a day.

Ecuador has been negotiating with China since 2011 to raise financing for the project, which was announced in 2007.