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Exim Bank to fund $1.67b for Cambodia oil refinery

Xinhua | Updated: 2013-10-16 15:58

PHNOM PENH - The Export-Import Bank of China (Exim Bank) on Wednesday signed an agreement to fund a $1.67 billion loan to a Cambodian company for the construction of an oil refinery.

The loan deal was inked between Exim Bank's Chairman Li Ruogu and Hann Khieng, president of local project partner Cambodian Petrochemical Company, under the presence of Cambodian Permanent Deputy Prime Minister Keat Chhon and Finance Minister Aun Porn Moniroth.

The agreement came after the Cambodian Petrochemical Company and several Chinese firms signed in April a Memorandum of Understanding to jointly build a five-million-ton oil refinery project in Cambodia with the investment amount of $1.67 billion.

Speaking after the signing ceremony, Keat Chhon said: "The project will be hugely contributing to developing the economy and reducing poverty when it comes to fruition."

Li Ruogu said China and Cambodia are close friends and the Exim Bank will continue to help Cambodia in order to further deepen the Sino-Cambodian ties.

"The Exim Bank believes that the oil refinery project will contribute to developing Cambodian economy and society," he said.

Cambodian Prime Minister Hun Sen on Monday urged China Petroleum & Chemical Corporation (Sinopec Corp), the world's fourth-largest oil producer, to expedite its process to build the oil refinery by 2018, according to a spokesman.

The premier made the request during a meeting with Cai Xiyou, the visiting senior vice president of Sinopec Corp, which is one of the major stakeholders in the project.

"Prime Minister Hun Sen supported the project and urged the company to construct the oil refinery as soon as possible in order to enable Cambodia to produce oil by the latest 2018," Eang Sophallet, personal spokesman for Hun Sen, told reporters after the meeting. "The premier also advised the firm to reduce impact on environment as much as possible."

Cai Xiyou promised the premier that the Sinopec Corp would push forward the construction of the oil refinery in Cambodia as soon as possible.

He said the company would use new and high-end technologies to build the plant with international standards and minimum impact on environment.

The oil refinery will be built on the 80-hectare area within the boundary of Preah Sihanouk Province and Kampot Province, according to the master plan.

Currently, Cambodia entirely imports oil and gas from Vietnam, Singapore and Thailand as its seabed's oil and gas have not been exploited.

Last year, the Southeast Asian nation spent $1.62 billion on importing about 1.65 million tons of oil, according to the record of the Ministry of Commerce. During the first eight months of this year, the nation imported 1.1 million tons of oil, costing $1.04 billion.

The government has estimated that the demand would increase up to 4 million tons a year in coming years thanks to rapid economic growth.

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