Chinese major, PetroChina, is in negotiations to purchase Valero Energy's shuttered Aruba refinery.
Asia’s largest oil and gas producer has entered into a non-binding indication of interest for the 235,000 barrel-per-day plant on the island of Aruba for $350 million, plus working capital. The deal follows a pattern of Chinese oil giants making large, overseas energy acquisitions, especially in developing regions like Africa and South America.
The plant has two “fairly new” coker units as well as upgraded hydrotreating capability, but has been stricken with high refining costs. Despite the Aruban plant being idled at least twice in the last few years due to poor profit margins, the island's proximity to Venezuela (China’s fourth largest oil supplier makes it a very attractive purchase for PetroChina. Currently, China imports 460,000 barrels of oil per day from the South American country, but is set to increase shipments to as much as 1 million barrels-per-day by 2015.
China National Petroleum Corporation (CNPC parent of PetroChina, is building a $9 billion refinery with PDVSA, Venezuela’s national oil company, off China’s southern coast to pave the way for even more crude shipment’s to the growing superpower. PetroChina has said it wants to double global trading and marketing to 8 million barrels-per-day by 2015 from 2010 levels.