China's Wison Engineering Company and South Korea's Hyundai Engineering and Construction Co. have signed an agreement with Venezuela's state oil company PDVSA Petroleo SA (PDVSA) on Saturday for building the oil conversion project in the Puerto La Cruz refinery, east of the country, according to a report from Xinhua.
Under the terms of the deal, Wison and Hyundai will be responsible for constructing the basic processing units, and upon completion, for the installation at the refinery of the hydro-processing sequential unit, which is being developed by French company Axens.
The hydro-processing sequential unit will be used in processing the heavy crude from the Orinoco Oil Belt "Hugo Chavez," which is located south of Guarico, Anzoategui and Monagas in eastern Venezuela.
Regarding the deal with Wison, PDVSA president Eulogio del Pino said: "With this agreement we'll stimulate processes to obtain high-quality products at high commercial value."
The site of the project is certified to have an oil-bearing area over 55 million square kilometers and has potential for keeping more than 297 billion barrels of oil, making it the largest oil reserve in the world.
Wison, a leading private sector chemical engineering, procurement and construction management service provider in China, said that its procurement and construction contract for the "Deep Conversion Project" for the oil refinery in Puerto La Cruz, Venezuela, is by far the largest oil refinery project in Latin America acquired by any Chinese enterprise to date.
The total contract value amounts to approximately $830 million, according to the company. Under the agreement, it has to complete the project within 12 months after commencement of work.
This new contract is in fact the second to be awarded to Wison by PDVSA. In June 2012, the company also won a $2.997-billion engineering, procurement and construction management deal, in which Hyundai Engineering & Construction Co. Ltd. and Hyundai Engineering Co,. Ltd. were likewise jointly participating as "Consortium Hyundai-Wison."
Under the first deal with the Venezuelan state oil agency, the consortium was given responsibility for the site preparation, procurement and construction of land improvement, new tankers, administrative buildings and temporary facilities for the "Deep Conversion Project" in Puerto La Cruz.